Anyone managing small business knows the importance of managing the finances with close attention. Failure to do so can put you in hot water very quickly. Small businesses do not have financial cushion like their large counterparts. They are working on a shoestring budget and any hiccups in the cash flow will show up in the financial health of the business very quickly. So how do you watch and protect the financial health of your business? Here are 6 tips you can use.
- Protect your credit rating
All businesses need to borrow money. Lenders turn to credit reference agencies to ensure that the people and businesses they lend to are reliable, and are likely to repay. Building a good credit rating simply means demonstrating that you pay every bill on time. Don’t be afraid to use credit – using credit responsibly will be noted by the agencies. Simply make sure you settle every bill promptly, and if you cannot for any reason, talk to your lender – they should be able to work out a solution to pay, which will reduce the damage to your credit rating.
- Protect yourself from liabilities
You cannot afford the risk of having someone sue you and leaving you with a big compensation bill to pay. Every business owner needs Employers’ Liability insurance cover to protect them from injury claims from employees – it’s a legal requirement. But you may also need public liability cover for customers, the public, delivery people, and others who enter your premises. Additionally, you may need professional liability cover – as well as property and commercial vehicle insurance, and business crime cover.
- Protect your Data
Data – particularly customer data such as credit card numbers – is valuable. What’s more, you could be liable for huge fines if that data is leaked.
You need security measures to protect your network, including your Wi-Fi. You need security protocols to dictate who can access your data and how and where they can do it – and a disaster plan if things go wrong.
- Protect your supplier relationships
You can’t run a business without the support of your suppliers. You need to pay on time. If you don’t, you may find yourself looking for new suppliers – and discovering that word has got out.
If cash flow is tight, it can be better to get external funding to stay on top of the bills. A short-term loan, Merchant Cash Advance, or a Line of Credit could help.
- Protect your Cash
Many businesses still use cash. Unlike electronic payments, cash can’t be hacked, but it can be pocketed by dishonest employees.
The latest EPOS systems provide very precise records and make stealing from the till almost impossible. They are a sensible investment – they can also simplify book-keeping and stock control, as well as safeguarding your money.
- Protect your business with the right finance
Borrowing is inevitable when you are starting a business – and when you are growing it. Paying for machines, premises, vehicles and stock – even ensuring you have enough money to pay your staff on time – can all mean borrowing.
However, there are many different types of business funding – and getting the right kind for your particular business need is vital to keep costs down. A lending expert can find you the most appropriate type of funding for a particular need and help you find the most cost-effective lender.
Obviously, you must stay in control of your borrowing – but with expert help, you can find that getting the money you need to protect your business plans can cost less than you might think.
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