No matter how intimidating running a business might be, your entrepreneurial spirit can help you overcome its challenges. From selecting the right location for services and products you want to offer, to hiring the right talents that will help drive your company to success. However, starting and running a business involves planning. Financial decisions encompass the most stressful decisions you’ll have to make, both before and during your company beginning. One of the most difficult tasks of running a business you’ll encounter is developing an adequate finance strategy.
Lean and mean as a viable strategy
Most companies are fixed onto the idea that everything needs to be perfect before a launch – even if that ends in years of development and luxury offices. This couldn’t be further from the truth. Rather than having a perfectionist mindset and holding on to the notion of a pre-made perfection before a company launch, start with a rudimentary form. In other words, rather than spending months, or even years, on perfecting a product without even showing it to the masses, present it even in a very rudimentary form. To have a wide uptake from customers, you need to speak to them and determine whether or not the product has appeal. If your customers only have a chance to communicate through their indifference, they will already be at the point of not caring whether your company fails or not.
Use financial platforms
In the last two years, the financial sector changed. The traditional financial institutions were challenged by the success of their new tech competitors – Online financial platforms. Financial platforms are online platforms that enable you to find the right financial service, whatever your circumstances might be. For instance, financial platforms like MyFi from New Zealand offer a seamless application, smart decision metrics and many other online features, like budgeting tools that assist you in controlling your money and tracking your income and spending. Such tools are invaluable for any small company, especially ones that are on a tight budget or some other growth restriction. Besides having full financial service for information and blog for all things finance, these FinTech platforms are excellent for finding funds or acting as a digital lending service, Goldman Sachs’ GS Select as a prime example.
Prepare for year-end
Ensuring that you don’t miss out on valuable exemptions and allowances that you’re entitled to, is based on proper planning and taking advice during the year, rather than leaving until the end of the tax or financial year. If you leave it too late in the year, you will often miss out on what you’re entitled to and end up with bigger tax bills. Bringing expenditure into the next financial year can have an enormous impact on your tax position and financial results. Taking profits from the company in the most tax-efficient manner minimizes your tax bills – just remember to consider the timing of paying dividends and bonuses as this can also defer or reduce taxes. The same is true for making improvements on how you manage the company’s finances and record-keeping, as this can improve cash flow and profitability.
Answer questions preemptively
When meeting with lenders and investors, preparing all information beforehand is advisable as you will be able to answer all of their questions even before they tried asking them. Preparing for and knowing the battlefield, even if it is only a business one, is an obvious tactic for any entrepreneur. This also applies to a business plan, as well as where you want your business to go, what milestones you’ve planned, and where the finances will go. Doing your research before a meeting with potential investors will ensure that you know what questions they might ask and be prepared for them. Knowing the questions ahead of time will help you have a prompt and confident response, rather than just looking confused and insecure. This, in turn, ensures a stunning presentation and a much more professional look and feel.
Developing a financial strategy that addresses business needs in the short-term while still being able to deliver on long-term goals might seem like an overwhelming process. And yet, with a bit of preparation and research, you will discover that it is quite within your grasp. Financial planning is crucial in the business world, so ensure that it has the same importance for you.