Being a business owner is a multifaceted job. On the one hand you have to give off your public image to your clients in order to build a strong brand and a trusted reputation in your field. On the other hand you have the ‘behind the scenes’ side of of your business where you have to juggle keeping your employees happy and to build solid relationships with investors, suppliers, creditors and your bank.
If both these sides of a business aren’t functional and solid, there is always the potential for failure. Therefore it is essential to focus on the ‘behind the scenes’ side of things as much as you need to be building your business to the outside world. One of the most critical areas of the internal part of your business is of course your finances and unfortunately this can be one of the trickiest parts to get right. So if you are struggling to know how to get on top of the finances of your business, in order to ensure that your business is protected, read on for how to do just that.
Being Creative With Your Financing Options
Building up debt in the initial stages of any businesses is pretty much inevitable, so the real challenge is how you go about paying it all off and how to stop adding to that debt. As debt can very easily spiral out of control it is very important to be clever with how you go about getting your business to a healthy financial situation.
A strategy that is benefiting many companies, both new and old, is something called ‘receivables factoring’, which essentially prevents the need for further loans or credit cards. It works by you sending off your monthly invoices, them sending you an advance on these invoices, which will normally be around 70% of the total amount of those invoices. Then once you have received payment from your clients, you pay it back with around a 2% interest charge. This is a great way for new businesses to get through the more financially demanding moments, without having to build up any new debt.
Businesses are becoming more and more exposed to lawsuits from a whole manner of different sources. Therefore to avoid being in the situation where you will have to look for a tax lawyer or law firm to represent you in your lawsuit, it is much more cost effective to wisely invest in proper business insurance. Many lawsuits filed against small businesses have resulted in those businesses having no other choice than to shut down. Therefore litigation insurance is one area where your money is very well spent. Protecting yourself from personal injury claims has saved many a business from collapse as people are becoming more and more litigious and even the smallest injuries, on business properties, are now being filed for.
You will also want to look into commercial property insurance, commercial vehicle insurance and also perhaps even business crime insurance. So look into the different policies available and which ones will be most necessary for your company to ensure that your business is completely protected.
Of course it is not just the physical assets in your company that need protecting, you will also need to protect the bread and butter of your company; your data. Businesses in the 21st Century revolve around data and any business that doesn’t properly protect that data is in danger of losing everything. Therefore looking into the best data security programmes and software in order to protect your data, and therefore your business, is one of the most important investments you can make to protect your business and your business finances.
Protecting Cash Reserves
Although it is safe to say that electronic payments are a firm fixture in our consumer society, there are still are a huge amount of business transactions that are carried out in cash. According to recent studies, almost 40% of business transactions are done in cash, so it is also essential to protect any cash reserves that belong to your company. Investing in a solid and reliable smart safe will ensure that accounting errors are reduced, theft is avoided and smart safes can even communicate with your bank so that you can receive credit based on the amount of money that is in your safe.
The financial health of your business is directly linked to your livelihood and your company’s future opportunities. Therefore failure to adhere to any of the above could result in all your hard work crumbling around you. Ticking all these things off your list will give you the confidence to know that you can safely focus on the other areas of business, knowing that your company and its finances are properly protected.