So, you’ve got a genius business concept that you’re ready to introduce to the world. Maybe it’s a resume writing service, or perhaps you’re opening a new restaurant. No matter what your small business idea is, there’s no question that it takes time to get it up and running—and primed for success! Profit certainly won’t happen overnight, but there are a few ways you can refine your strategy to jumpstart your business, and set yourself up for long-term success.
In this article we’re discussing 4 financial tips to help you open up shop and design your business model for maximum profits from the get-go.
1) Draft a business plan
Before you reach out to any investors, potential partners, or even announce your business to the public, you should draft up a detailed business plan for your company. This document will help your cause when you’re seeking financing, and help bring your vision to life when you’re talking to community members and potential business partners.
What kind of information should be included in a business plan? Your plan should paint a picture of the purpose of your business, where you see it in the long-term, and include pertinent financial information to demonstrate stability.
- Business concept: Explain your creative vision for your company, where it fits into its respective industry, and how you plan to make it successful.
- Marketplace section: In this section, you should focus on your potential customers and how your product or services will address their needs. Ideally, your business should present a unique option for consumers, or fill a need that’s not met in the current marketplace.
- Financial: Your financial section should include your income, a cash flow statement, and a balance sheet. This information gives stakeholders insight into your current funding, and inturn, the risk or potential opportunity of investing in your business.
2) Set up processes ahead of time
Building a small business from the ground up is no easy task. There are tons of details to consider and coordinate—from hiring employees, to stocking up on inventory and preparing for your grand opening. But the key to ensuring (almost) everything goes as planned, is setting up processes and being proactive about speed bumps ahead of time. One of the most robust plans you’ll need to consider before you cut the red ribbon and open up shop, is finance management. Finance management involves bookkeeping, accounting, payroll, and taxes—all very important elements in your business’ success and compliance with regulatory agencies.
Here are a few processes you may want to plan out well in advance of opening day:
- Hiring: There’s a lot more to managing employees other than just monitoring time cards and coaching for success. In order to make sure you’re in line with state and federal regulations, you’ll need to have a hiring process that meets certain employment standards. This includes filing a W2 and W3 form for each staff member on your payroll, setting up a payment schedule, and abiding by your region’s other employment rules. To help you manage these procedures, you might consider enlisting the help of an HR professional or HR software program.
- Bookkeeping and Accounting: As soon as you start making any business-related transactions in support of your company, you should implement a bookkeeping and accounting process. This will help you stay organized, optimize your finances, and remain in compliance with small business accounting standards. You can opt to hire a bookkeeping professional, use a software program, or do it on your own, if you’re up to the challenge!
3) Secure great financing options
Throughout the lifetime of your business, you’ll likely need to access funding outside of your savings account. Whether that’s through an investor, or with a bank loan depends on your needs and preferences. Having a detailed business plan, demonstrated success, and a positive lending history are a few ways you can qualify for great financing. In addition to traditional financing, you might consider going the crowdfunding route.
4) Consolidate operational costs
We mentioned the benefits of establishing a bookkeeping and accounting process earlier in this post, but another way this financial tip can benefit you is by helping you evaluate your expenses. Whether you’re overspending on your office space or your inventory, you can catch these indicators early on when you have a process that monitors these details closely. But how do you actually cut down on expenses? Let’s look at a few creative examples!
- Go remote: Rent is one of the biggest expenses of small businesses. So, if you’re able to reduce or eliminate the office space you use, you could save hundreds—even thousands—of dollars each month.
- Outsource: If you need occasional operational support for one-off design projects, analytical audits, etc. you might consider outsourcing your work by hiring a freelancer. Freelancers often work for less than internal employees, and are a great option for intermittent projects.
- Go green: Reduce your utility and resource costs by going green! Invest in solar energy, go paperless, or start using reusable kitchen supplies. Even small changes can make a difference to the environment, and your operational costs!
Starting your own business isn’t easy—and it can take months, even years to see financial success. Use these tips to help you make your business more efficient, more financially secure, and more profitable.