A new year is a great benchmark to help you organize your personal and professional life. There’s a feeling of a new beginning and that could be the opportunity to put your finances in order.
It’s important to note that a lot of such projects get started in January and don’t really last. It isn’t enough to want to make a change in your business. You need to stick with your goals and work on them throughout the whole year.
1. Have a plan
This is the first thing to do if you plan to make any significant changes in your financial goals. It’s imperative to have a plan for what you want to accomplish and to lay out the steps as to how you plan to achieve it.
The plan should be more than just a list of ideas or unobtainable wishes, it should have clear timetables and schedules on which you should operate and with which you should measure how your finances are changing. It’s also useful to revise the plan on a six-month basis.
2. Try to keep business and personal finances separate
Those who run a small or a home-based business often have a problem with keeping their personal finances separate.
It often happens that the owners use company money to cover some sort of personal expense and the other way around – they use their personal money to patch things up when there’s a need for it.
Try to stop doing this in 2018. There are no rules how to do it. Part of it is just having the discipline to keep the bank accounts separate and part is to plan things well.
3. Cash flow
Cash flow is one of the most important concerns a business can have. It’s often more important than having a lot of money saved or having big investments. Cash flow is used to keep your business running on a day-to-day basis. You need to set up a system that will keep your invoices in check and cover these expenses.
One of the ways of doing this is to use invoicing to get the payments you’re owed right away. That means that you need to give up a percentage of your income in exchange for this service, but it’s a worthy expense because you’re buying stability.
4. Prepare for bad times
Regardless of how good your business is doing now, there’s always a chance for things to go wrong and for your finances to be affected. There are factors beyond your control that can sink your business and the only thing to do is be prepared and leave some of your revenue in an account dedicated to this purpose.
Whenever you can, leave a percentage of your income to the “bad times” account and don’t plan to use this money for anything else, but this purpose.
5. Use experts
This new year should be the one where you step up your game and use experts to make the most out of your business.
Tax codes are so complicated that you need to have all the help you can get. This may seem like something that’s only available to big corporations, but that isn’t the case. The goal should be to organize your finances in a way that will save you the most money on taxes and allow you to grow your company.
6. Using revenue carefully
Once your finances are stabilized, you should start thinking about the ways to invest your revenue and expand your business. This needs to be done in an orderly fashion and with clear goals in mind.
The best way to go is to decide which percentage of your revenue will be dedicated to what purpose. At least fifty percent should go to covering daily expenses, thirty percent should go to mid-term plans and the rest should be saved for rainy days.
Trying to better yourself and to expand your skills and education doesn’t immediately seem like a financial decision, but it’s that more than anything. The best way to improve your business and your personal finances is to try to learn as much as you can about the industry.
It might be difficult for a busy person to attend a lot of lectures and dedicate a lot of time to personal improvement. If you need to choose just one course to take during the year, it should be something related to tax policy or the use of technology in a business setting.
8. How much is your time worth?
It’s often difficult to think about your time as a resource. However, once you’ve been in charge of a business for a while, you’ll notice that it’s the most important resource you can have. Still, it’s rather difficult to quantify and manage.
Try to calculate how many hours a day you actually work and how much money you make per day. That way, you’ll know how much your hour is worth and be able to make scheduling decision based on this calculation.
9. Prepare for failure
In the end, you need to be prepared if your financial goals and plans not working out the way you expected.
Businesses are complicated and the competition is tough and things might go wrong regardless of what you do. It’s also possible for some of your plans to succeed while others won’t.
You shouldn’t get discouraged by this and you need to be mentally prepared for this possibility. That will help you keep going in case this happens and that’s the most important thing if you want your business to last.
This year can be the best year for your business as of yet. You need to plan for it and to work towards your goals slowly and with a sense of purpose.
Victoria Lawes is a Digital Marketing Strategist. She works with driven, creative, and passionate entrepreneurs and small business owners that want to bring their visions to life. Enthusiastic writer who follows latest marketing and technology trends to get a glimpse of the future. Contributor at bizzmarkblog.com