Growth Tips for Business Owners
Growth Tips for Business Owners
There’s nothing small about owning a small business. It’s a massive undertaking that requires huge amounts of time, money, and your own efforts. Taking your first entrepreneurial steps can be incredibly daunting, but luckily, you do not have to do it alone. It’s critical to have wise counsel to back you up, assess your financial options, and come up with a plan that’s the best fit for you and your business. Here are five financial tips to keep in mind as you look to start up, maintain, or further grow your business. As is always the case, please bear in mind that Eaton doesn’t provide legal or tax advice. Consult your legal and/or tax advisor.
It might seem counter intuitive, but the best time to explore funding options may be when your business is performing at its peak. If you’ve had 1 or 2 good years of business you should consider trying to open a line of credit. Banks may be more willing to lend to a business that is performing well and looks really great than to a business that is on the ropes or in the belly of the beast. In trying to get money before difficulties arise, you can keep your loan options open and not resort to borrowing from a harder money lender or more unfavorable financing terms.
Know Your Finances and Keep Thorough Records
As in all of your financial comings and goings, it is absolutely crucial to understand where your finances presently lie, and there is no better way to do this than to keep detailed records of your assets. Keeping your profits up and your costs down requires you to take a look at where you are spending the most, and seeing if there is any way where higher costs can be reined in. One good practice to keep your finances on the up is to treat your business as an entirely separate entity. While it is tempting and easy to write off a car payment or a dinner as a business expense, doing so recklessly can undermine your business and hurt your overall growth.
Knowing the current state of your finances can be incredibly beneficial. With your financial records and projected costs outlined in front of you, you are then able to stress-test your business, seeing how your model will fare with differing and perhaps less forgiving economic circumstances. Knowing these details can help you prepare your business for a tougher market – like we have all had to do with the current pandemic. As they say, knowledge is power.
Have Liquid Assets on Hand
If your business is relatively new or you are looking to start your own business in the near future, it’s important to keep in mind that you will most likely experience considerable volatility for the first year or two. Therefore, it’s essential to have your savings built up to a point to where you can comfortably live without revenue from your business until things stabilize down the road and your business is better established.
Put the Right Partners on your Side
There are a lot of different factors to keep in mind as you look to grow your business, and it can be an overwhelming challenge to face alone. Luckily, there are advisors and teams dedicated to helping you grow your business and making the complicated simpler. The Eaton Business Team and the Infinex Investment Team are always go-to-resources at both a personal and business level that you can depend on to assess your needs in order to tailor a financial model that is the best fit for you.