Financial practices for SMEs
According to Simply Business, over 600,000 small businesses are at risk of collapsing this year in the United Kingdom due to the economic crisis faced by COVID19. Now this could be foreseen even during the early months of lockdown. The future of new small and medium enterprises being brought to market is still feasible and possible. In every crisis there is opportunity. If you are someone who wants to be an entrepreneur or you are a surviving SME owner at this point, in this article, we will lay out some financial tips that could help your small or medium business stay stable – or better yet, get richer.
A good financial practice is when you know your business plan. Identifying the basic concept of your plan is one step forward to help you stay on track in achieving it.
Have a plan
A plan doesn’t only involve knowing what your product or services is, but also includes figuring out the status of the market and your place within that.
Business over personal goals
Seeing money flow into your business could lead to you forgetting your priorities as a business owner. Unlike being an employee who gets their paycheck and are able to spend that earned payment on whatever they like; being a business owner is different. Why? Because the money you earned from your business should be allocated to the growth and expansion of your business, and to salaries, to investors, to technology, to paying the bills, the rent and the tax.
Control cash flow
It is also vital for the owner to have the discipline of budgeting costs. You can control your business expenses by exploring different options of suppliers. Some supplies offer the same quality but for a lower price. In addition to that, controlling your accounts payable and closely monitoring creditors and debtors is vital to ensuring your cash flow stays in control and keeps flowing.
