Keeping a steady flow of money for your business can be quite difficult if you don’t have the proper tools or knowledge on how to keep your money managed. Hopefully, this short guide can give you a bit of insight on how to keep your business funded.
Before you can ever start a business, you need to have money that you can invest in the business. You may be lucky enough to get small business loans from your local banks, but in this economy, a loan is not the most reliable source. Most of your business funding will come from your pocket and the pocket of your friends and family.
1. Start a business savings account. In this account, you will need to contribute as much money as you can afford to start your business. It is recommended that you invest 60-70% of your income into your business account. It may sound like a lot, but keeping a business funded consumes lots of money in its early stages. It’s best to have your business savings separated from your personal savings because you may be tempted to spend it, so make sure you keep your business funds in a separate account. 2. Ask your friends/family for money. There will always be a couple of friends and family members that will be willing to give you a few bucks to help you start your business. You may want to see if there is any amount of money they can afford to give to you, instead of loan to you. Why? Because if your business fails, you don’t want to have to pay back loans with money you don’t have. If they do loan you the money, the most professionally thing to do is have a written contract displaying how much they gave you, and how long you have until you are expected to pay them back. Both parties should sign the contract, and each person should have a copy of it.
Once you have money to start the business, you will need to keep the money managed. You won’t be able to rely on loans all the time, but with these tips, you can manage the money you do have.
3. Shop around for business equipment. Whatever kind of business you have, you will need to get all of your business equipment at the lowest price possible. Even after your business is going well, you will still want to be as frugal as necessary. Do endless research and price comparisons on the items you need to start your business. Find who has the cheapest prices and purchase from them. What if the cheapest items aren’t as good as the more expensive ones? You will still have to settle for the cheaper ones if you can’t afford the more expensive ones. You will just have to find a way to make the quality of that product better. This is where creativity comes in. I personally have bought cheaper quality items, and after I got through working my magic, the quality was much better and well worth the work. 4. Keep a record of your expenses. The way to manage business finances is by using the same fundamentals for managing household expenses. Keep a record of how much money you have coming in, how much you spend, and what you spend it on. When you see exactly where your money is going, you will be more careful about how you spend it. The key is to not be wasteful at all. You have to be wise about every single dollar you spend. If you do this, the money that you have invested in your business will last much longer. 5. Generate more money. In order to keep your money flowing, you have to have some reliable source of income. Having a couple of jobs on the side is the most reliable income you can have. You can’t always rely on loans. You have to have money that you can spend that won’t have to be paid back. I personally love the idea of funding my own business because if the business fails, I won’t have to worry about paying anyone back. So think about that before you accept lots of loans. Remember that loans have to be paid back regardless of the level of success of your business.