If you have heard of the Hedaya Capital Group, you likely know of us as a source of working capital to qualified businesses in the New York City and Tri-State area. For years, we have been happily helping small businesses get the extra working capital that they need when they need it. That being said, there is a lot more to running a business than looking for extra capital to fuel your growth. In fact, one of the best things that you can do for your business is to manage the money that you already have as optimally as possible.
While we are known for helping small businesses find the money that they need to grow, that is not what we will be discussing in today’s blog. Instead, we will be discussing a few money management tips that you should follow as a small business owner to ensure that you are managing the money that you do have correctly.
Stay On Top Of Deadlines
So you run a business in the New York City area. You have bills to pay, loan payments to make, accounts payable to manage, and credit card payments to schedule. With all of the intricate inner workings of your business, it can be hard to stay on top of your payment schedule.
If bills are missed or if payments are made too late, your business can be negatively affected. Late fees can be added to the total of the bill, interest can be added to your loan, and your business credit can be penalized if you are not on top of deadlines.
Luckily, there is a simple solution. Keep everything on record. Whether it be a notepad or a digital calendar, you must keep all of your deadlines recorded so that you will never miss one again!
Separate Business Funds From Personal Funds
Hopefully, this is not the first time that you have heard about keeping your business accounts separate from your personal accounts. That being said, if it is, we urge you to separate your accounts immediately.
All too often, small business owners forget to separate their accounts when they begin developing their business. When business accounts and personal accounts are mixed, it can become hard to determine what funds are being used when, and for what purpose.
Additionally, separating your personal accounts and your business accounts can make it easier to file for taxes, track profitability, and monitor spending. So what are you waiting for? Separate your accounts immediately.
Time Your Purchases
There comes a time in the existence of every business where cash flow becomes low. One way to combat times of low cash flow is to time your payments. By timing your payments appropriately you can ensure that all of your bills are paid before you make necessary and unnecessary purchases.
Another thing that you can do to avoid times of financial stagnancy is to work with a factoring company like ours. Specializing in accounts receivable financing, our company (and others like ours) will purchase your invoices from you before your customer has paid you. In doing so, you can get the money when you need it — not whenever your customer decides to pay.
Manage Your Inventory
As a small business, it can be a little hard to manage your inventory at first. Some people order way too much inventory only to have it collect dust in their warehouse. Others, however, think that they have ordered more than enough only to sell out right away.
Ordering too little or too much of an inventory item can be a costly mistake. On one hand, you pay for the inventory only to have troupe selling it, and on the other hand, you miss the opportunity cost of selling the item that you have already sold out of. By managing your inventory closely, you can minimize your financial risks.
Have A Savings Reserve
While we could continue to list countless other tips on money management, our last tip for small business owners is to have a cash reserve. It is important to remember that nothing is guaranteed in the business world. No matter how many precautions you take, or how many of the management tips that we’ve discussed today you adhere to, things happen that are outside of your control.
Market fluctuations, lawsuits, poor fiscal years — all of these things and more can be a huge blow to a small business. By having some sort of cash reserve saved up, you can minimize the blows that your business might suffer.
Let Our Team Help Your Business Grow
As a business owner, there are many things that you can do to protect it from a future fiscal disaster. But what do you do when you are having trouble growing your business or are in a state of fiscal stagnancy?
At the Hedaya Capital Group, it is our number one objective to help businesses find the working capital that they need to grow sustainably. Contact us today to speak with a member of our team about what we can do for you and your business.