Business Finance & Where to Start
Business Finance 101 – Are you thinking about starting your own business? Or perhaps you’ve already taken the plunge, but you need some assistance with the finance side of the business. The following information will give you a general idea of what business finance really means, and how to incorporate better business finance practices to make your business more successful.
The main purpose of business finance is to manage assets and money to minimize financial risk, and meet short term and long term needs to create a successful business. The following are regular business practices that you should incorporate if you haven’t already:
Budget – Having a budget for a business is obvious, but sticking to that budget is essential. Check in on your budget regularly and re-examine and adapt the budget based on the needs of your business. Keeping accurate profit and loss statements and cash flow records is key.(spreadsheet)
Plan – Hope for the best, but plan for the worst. Things happen that are beyond our control. This is where savings come into the play. The only way you can handle the unexpected is to plan by having an emergency fund.
Establish a business account – Keeping your business finances separate from your personal finances makes tracking income and expenses easier, especially for tax purposes.
Simplify bill paying – Use automated bill payment services when available. Make sure you have these payments accounted for in your budget. When you have this type of system to account for your bill amounts and due dates your business will run smoother.
Diversify – spread your money out across different investments. Diversification does not guarantee against loss but, this will help minimize your risk. More on investing.
Taxes – Business taxes can be complex. Simplifying taxes starts with being organized, keeping your records detailed through the whole year and having this information saved in a safe place. Speaking with an accountant or CPA will be beneficial when dealing with deductions and your obligations. If you feel comfortable filing your own taxes, there are several options for online filing, like TurboTax.