3 Simple Steps For Your Small Business’ Financial Success
A necessary part of a successful business plan is control over your business’ finances. If your business develops financial issues, it’s often only a matter of time before you’ll be facing bankruptcy or looking for loans for bad credit. Keep on top of your company’s finances at all times so you recognize the early signs of a problem.
Creating a Business Plan
A business plan covers the important aspects of your company, such as goals, methods and requirements. Make a complete business plan to keep yourself on track. You’ll need a business plan to apply for credit and other sources of financing, such as local grants.
Start Record Keeping
Accurate record keeping and organization helps you to identify shortfalls and track your bills. Use a paper or electronic ledger to keep track of all your accounts, including expenses and profits.
Make a list of recurring bills and expenses, organized by due date or payment date. If you follow your expenses, you’ll know what you have to pay out each month. Use your expense and bill information to identify areas you need to cut costs in.
Keep business money and records separate from your personal ones to avoid confusion. If you haven’t already, open a bank account in the name of the business. Mixing your money with that of your business will prevent you from getting a clear picture of your company’s financial state.
Develop Business Credit
Use credit products designed for a business, as opposed to your personal credit or credit cards, for financial or expansion needs. Credit companies and banks often have perks, such as a lower interest rate or higher credit line, reserved for businesses.
If you use personal credit in your name for your company, you’re personally responsible for the debt. You can limit some of your liability by using business credit accounts in your company’s name.
Be careful with your business credit cards or any loans you take out. If you’re using loans and credit consistently to cover gaps in your company’s budget, you must lower expenses to prevent financial disaster.
If you have poor credit, you might have trouble getting a business credit card or loan. Although the credit product will be in your company’s name, the creditor or bank will look at your credit as part of the application process.
While you can get a business loan with bad credit, review the terms carefully to make sure you can afford the payments before you sign. Bad credit loans have more fees and higher interest rates than traditional loans do.