Business Finances: The 5 Best Ways to Manage Your Money
Friday, January 30, 2015, 6:00 AM | Leave Comment
Money management is especially critical in business, as that is the main criterion that determines profit or loss and the company’s survival. Here are five key strategies for successful business finance.
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Develop and follow a clear budget
A business budget should include forecasts that project future gains or losses based on predictable economic patterns.
There may also be unexpected contingencies to plan for, as well as monthly operating expenses and annual costs, such as bonuses, training, or equipment updates.
A short-term savings account for emergencies and a long-term savings plan for capital improvements may also be helpful.
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Facilitate purchases with merchant solutions
Any business can attract more customers with merchant solutions and check 21 payment processing.
An added bonus is that customers will spend more when they can pay with credit or an array of convenient options.
Make it easy for buyers to pay as they wish, and they will come back, bringing friends and relatives with them.
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Earn interest on profits
Depending on the profits that began to accrue, set aside a portion to earn interest in savings accounts, money market accounts, or investments.
While some funds must be kept liquid for company operations, unneeded funds should be put to work to increase the profitability of the enterprise over time.
Having a financial expert on the board of directors or as a mentor is a good move in obtaining insight and advice on the best ways to make money on your earnings.
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Reinvest in the company
Some organizations just keep raking in profits that go into the owner’s pocket without taking care of company needs.
You can see old equipment, unattractive facilities, and poor quality services or merchandise in this kind of business.
Smart managers put money into the business when needed to keep it healthy and operational.
In addition to routine operating expenses, there may be an occasional need for employee training, pay raises, facility enhancement, and equipment replacement.
Attention to issues like these can keep the business operating in the black.
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Give back to customers
Customers that feel appreciated will remain loyal and provide positive reviews online.
Occasional freebies during the holidays, an unexpected discount, and a small gift in the mail like a car wash coupon can all make a customer feel valued, and they will continue to do business with your company.
Effective financial management can reap big dividends over time. Direct company funds appropriately for sizable returns.
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