Paying attention to this financial aspect in a company allows it to stay afloat. Here are some tips for success in business finance.
1. The importance of saving
Before, during and after an undertaking, saving is an action for business growth, as it refers to having a favorable balance between income and expenses in order to have an amount earmarked for the future.
Saving can be used to pay some debts of the company, invest it in goods as a form of investment and even to improve the conditions of employees through better workspaces.
2. Make an action plan
Without a project with specific objectives and a goal that you want to reach, it makes it difficult to succeed on the path of entrepreneurship. Therefore, carrying out an action plan will facilitate:
- Visualize the strengths and shortcomings of the venture.
- It is the most expeditious way to hit the mark in the direction of the objectives.
- Uncertainty is reduced and crises are better managed.
- Collaborative work is promoted.
3. Avoid the mix between business and personal finance
One of the most common mistakes among entrepreneurs is mixing business and individual finances. The ideal is to set a budget, salaries and have an exclusive bank card to cover company expenses.
The consequences of not doing so preclude sound administration, legal situations with tax issues or affect cash flow.
4. Manage expenses
One way to optimize the business is to take care of what income and expenses are spent on. Let’s analyze this: There are fixed expenses such as office rent, employee payroll, investment in raw materials and other basic services. However, to realize which ones are necessary it is worth asking yourself:
- Can this expense be eliminated?
- Is there another way to reduce it?
- Why is there a fluctuation of expenses from one month to another?
Solving these questions are basic points for the healthy administration of any enterprise.
5. Research your market
Part of the growth process of a company is knowing who is your target audience to whom you are going to sell your product or service.
On some occasions, one way to achieve this is with a market study, since it is possible to collect the necessary data to know the behavior of potential customers. Likewise, having defined market data helps to know the competition and the business opportunities to improve.
6. Listen to expert recommendations
Every company in its early stages must take firm steps towards growth and minimize risks. For this reason, it is sometimes important to approach experts in the field to improve some processes through the following objectives:
- Increase sales with better strategies that save time and effort.
- Make a bigger difference with your competitors.
- Position the brand in the correct media.
- Give partners more time to make strategic decisions, while experts take charge of designing complex plans or manuals.
They usually have valuable contacts to connect and build alliances.
7. Time of maturity of the company
The economic maturity period (PMM) refers to the time it takes a company to recover the money spent on a product or service since its creation or acquisition and in relation to its sales cycle. It is a measurement that is done in days and offers an approximation of the liquidity of the company.
It is vitally important to know this metric, as it helps to establish product idea and creation times, sales stages and supplier payments.
8. Innovation as part of growth
Undoubtedly, technological advances have made many organizations care more about the product or service for their consumers. Innovation is part of growing a business to facilitate processes and create new areas of opportunity.
For example, through methodologies such as Design Thinking, they can generate new creative processes without the need to make radical changes or exaggerated expenses.
9. Make a budget
Running out of cash flow is one of the consequences of not having a detailed document of cash inflows and outflows; that is, a budget. Likewise, they are real and adjusted to the economic situation of the organization.
The results are calculated according to the timing of the budget, either per semester or annually. Therefore, no matter how good the idea and its execution are, if this document is not carried out, it will not be known what the cash flow in the company is.
10. Don’t underestimate training
No matter the size of the venture, the entrepreneur must be trained through forums, conferences, workshops and other business development aid courses. Similarly, it applies to partners and collaborators, as this reduces staff turnover and improves the work environment. In addition, having trained people increases the chances of success in the face of competition and continued business growth. The future and success depend on the good management of business finances, so it is important not to forget these tips to meet all the goals.