Now that we’re solidly into 2019, there’s no better time to make some serious changes. If you’re a business owner, that may mean taking a good, hard look at your small business’s financial situation in order to see where you can stimulate change for the better. Sound like something you need? Delve into these recommended financial resolutions to see how you and your business can shape up for your most lucrative year yet.
Thoroughly review your business budget.
The opportunity to identify where your small business can minimize expenses while maximizing returns is essential for the health of your business. Since most businesses must operate at the whims of the fiscal year, it makes sense that this review should take place within the first few months of the year.
Your budget should depend largely on your unique business. Even so, there are a number of common areas you might want to examine if you’re aiming to slash expenses. This can include cutting down on staffing during slower hours, if you’re dealing with a customer-facing business, or seeking out effective DIY marketing opportunities to keep from investing in pricey TV or internet advertisements.
Completely separate your business and personal finances – for good.
Completing the separation between personal and business finances is an essential step down the path to long-term financial stability for both parties. Fortunately, there’s a wide variety of solutions to help make this task fairly simple.
Start by opening bank accounts specifically developed for businesses. You’ll find options available through large banks, local credit unions, and other financial institutions, so shop around until you find something that complements your business’s needs.
You may also want to apply for a business credit card. Just like business bank accounts, there are dozens available, which should make it simple to select a credit card that fits into your business’s current financial situation.
Both business bank accounts and business credit cards also help you build business credit, which leads us to another essential resolution…
Build your business’s credit scores.
If you’re still in the early phases of business ownership, you may not have built any business credit whatsoever. Business credit will eventually become vital, however, as it can affect your ability to secure business loans, as well as the interest rates associated with those loans. The good news is that there are several ways you can get started.
According to Experian, one of the nation’s three credit-reporting agencies, there are simple steps you can take to build business credit from the ground up. You can begin by incorporating or forming an LLC, while other options include getting an official employer identification number (EIN) and opening business a bank account — which should likely be a component of your financial plan anyway.
Business credit cards are another great option. The cash-back rewards programs that sometimes go hand-in-hand with these cards offer plenty to love, but the opportunity to build your business credit is just as helpful.
Refine your record-keeping system.
No one really loves dealing with financial records, but it’s important that you’re able to keep on top of them if you want your business to stand the test of time. Refining your organization system can help ensure you’re ready to face any financial challenges thrown your way.
Still in primitive bookkeeping stages? Make sure you’re actually recording every detail that needs to be recorded. This should include information about each and every expense, including not only its cost, but what was paid for, why it was necessary, and more. Because it’s 2019, the best way to do this is likely through a software solution. Something as simple as a spreadsheet might do the trick, while accounting-specific software might be your preference if your business is growing rapidly.
Additionally, be sure to learn about your records as you deal with them. Financial challenges will almost certainly appear at some point, and knowing the ins and outs of the forms and other records you’re dealing with will give you a leg up when that time comes.
Set clearly defined financial goals.
It’s tough to build your business if you’re not shooting for specific goals, so consider using the SMART method – specific, measurable, achievable, relevant, and time-bound – to guide their creation. Setting financial goals that are specific and achievable can help spur productivity and guide your actions as a business owner. Plus, make sure that every goal is measurable and precisely developed to push your business forward. Likewise, don’t leave any room to guess when and how you’re aiming to reach those goals. A comprehensive plan will always serve you better than simply setting the goal, crossing your fingers, and hoping for the best.
Start 2019 Right
These tips may not help you snag that Forbes 500 spot in a matter of months, but complementing your own personal New Year’s resolutions with these key business moves offers a simple way to help your business maintain and improve its financial wellbeing throughout 2019 and beyond.