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Thursday, August 27, 2015

Five essentials in a small-business plan

Following a plan when starting and growing your own small business is crucial to its ultimate success. Today, we would like to take a little time to share some smart tips, tools and ideas to help get your business where you want it... and to keep it in great shape for years to follow, once it’s up and running strong.

1. Manage cash wisely


Your cash coming in and out is like the heartbeat of your company. Therefore, of course, you need to constantly be monitoring it, and actively looking for ways to save or improve on your current system.

This will help you identify all of your running costs and how much money you’ll need to stay in business all year long. During the early years of year business, it is important to factor in seasonality, look for weaknesses in cash flow and pay invoices on time in order to get an accurate idea of your finances.

When your company is low on cash, you can help by examining your business’ primary cash flow measures like your marginal cash flow (ex. cash flow from each additional dollar of sales) and cash flow cycle (ex. amount of time to receive cash from sales). To calculate these for your business and determine what you can do to improve them, try searching online or contact a professional.

2. Analyze performance


Build yourself a detailed business dashboard detailing the key points of finance for your company. Strategic and successful business operations require fast, up-to-date access to the most important business stats such as sales, profits, cash flow and more. You may be able to suffice with the built-in tools on your platform, or even an Excel spreadsheet. However, depending on your needs, you may need to develop a custom dashboard using more advanced, premium tools to easily access all your necessary performance data.

Tip: Make sure you know your break even point. This will help you see the minimum level of financial income you need to achieve your desired monetary returns.

3. Be tax smart


Precise record keeping is very important in every business — as is knowing the taxes you need to pay for your employees and understanding what deductions or concessions you may be entitled to claim for your benefit.

Here's what we suggest for new businesses:

Set up good accounting habits. A lot of banks today will provide free, daily bank feeds for customers with eligible accounts. This makes it easy to do business transactions using simple online accounting services. Also save any and all proof of purchases for business related expenses.

Get company credit cards and an account at Sam's Club. Save every receipt and record in a secured folder. Buying in bulk from Sam's or Office Depot can save a lot of money in the long run.

Consult a tax professional who can help you determine what hard copy and electronic business records you’ll need to keep on file and for how long (generally five years).

Be sure to ask your accountant about possible tax deductions for business related expenses while running your business, and tax concessions. Eligibility for concessions could apply to your income tax, capital gains tax, GST and fringe benefits. Searching the web is a quick and easy way to start finding out more.

4. Manage risk closely


Employ a risk management plan so you can ideally spend less time worrying about your new business' success, and more time building it. Be sure you have the proper and required insurance for the tools and equipment you absolutely need to stay up and running. Also, make sure to have a business continuity plan, diversify and widen your customer base, and monitor your reputation. All of these will help you remain risk free and on the fast track to success.

5. Promote


Marketing your business can be quite rewarding. You might use physical signs and banners or go digital with email newsletters and Facebook... the possibilities are endless. For physical promotions always think in bulk. Check vistaprint.com for deals before searching locally; online companies run promos often. Whatever you do, invest the time to really connect with and understand your customer base, and know how you can give them more of what they want. Support your fan-base and interact with them; utilizing word-of-mouth should never be underrated, especially if you’re providing exclusive offers. Finally, consider loyalty programs to encourage return customers. And lastly, never forget the up-sell; this is business!

Image: Geralt/Pixabay; CC0, US-PD