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Getting Started With Your Small Business Finances

Starting a small business is an exciting and rewarding endeavor, but it also involves navigating various challenging areas—one of the most important being finances. As a small business owner, understanding the financial decisions you will need to make in order to ensure your success is crucial. You can learn how to create effective strategies for managing your money while also staying compliant with regulations along the way.

In this guide, we'll explore essential topics that every small business owner needs to know when it comes to their finances. From setting up effective systems for keeping track of costs and income, learning how taxes apply specifically to your industry or business structure, as well as practical steps for developing budgets and plans that have long-term feasibility - by taking all these elements into consideration you can set yourself up for achieving sustainable success! Let's dive in!

Small Business Finances: Why They Are Important

When you're running a small business, it's important to keep a close eye on your finances. This can help you to make informed decisions about where to invest your money and how to grow your business. There are a few key things to keep in mind when it comes to small business finances.

First, you'll need to track your income and expenses. This will give you a clear picture of where your money is coming from and where it's going. Second, you'll need to create a budget. This will help you allocate your resources and ensure you're not overspending. Finally, you'll need to stay up-to-date on financial news and trends. This will help you to make the best decisions for your business. By following these tips, you can ensure that your small business finances are in good shape. Let's dive into these tips in more detail. 

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Get A Business Bank Account

One way to help you stay on top of business finances is to open a separate bank account for your business. This will allow you to track income and expenses more easily and help you keep personal and business finances separate. Additionally, a business bank account can offer valuable perks, such as hands-off money management and access to small business loans. Opening a business bank account is a good place to start if you're looking for ways to improve your small business finances.

Related Reading: How to Set Up a Business Bank Account

Keep Track of Your Business Expenses

As a small business owner, one of the most important things you can do is keep track of your expenses. This will help you stay on budget and make sure that your business is financially healthy. There are a few different ways to track your expenses, but the best option for a growing business is using a software program, like Freshbooks or QuickBooks, to track your income and expenses. This becomes extremely helpful if you have a lot of transactions and will help you get the most accurate picture of your finances.

If you haven't invested in bookkeeping and accounting software for your small business yet, now is the time! Setting these tools up early on will help you to form these habits before your finances get too messy. 

Related Reading: 5 Financial Accounts You Need for Your Small Business

Apply for a Business Credit Card

Another helpful tip for managing your small business finances is to get a business credit card. This can be helpful for two reasons: first, it can help you build up your business credit score if your credit card company reports to credit bureaus; and second, it can help you keep track of your business expenses. When choosing a business credit card, be sure to compare interest rates and fees so that you choose the card that is best for your needs. 

Create a Financial Plan With Actionable Goals

Financial planning helps you stay in control of your finances and make smart business decisions. To get started, start by setting specific financial goals, such as increasing your revenue or reducing expenses. Once you've identified your goals, develop a realistic action plan that outlines how you'll achieve them. This may include budgeting, investing, or seeking financing opportunities.

Regularly tracking and analyzing your financial data will give you insight into how your business is performing, allowing you to make informed decisions. By creating a financial plan with actionable goals, you'll be empowered to make better financial decisions, optimize your business operations, and ultimately achieve success.

Invest In Yourself To Better Understand Small Business Finances 

If you're like most small business owners, you probably didn't major in finance. And that's okay! But it does mean that you might feel slightly overwhelmed when it comes to understanding your business's financial situation. That's why investing in yourself and taking the time to learn about small business finance is important.

There are plenty of resources out there to help you get started. You can find online courses, books, and even articles on the subject. Taking the time to learn about small business finance will pay off in the long run. You'll be able to make better decisions for your business, and you'll be able to spot problems before they get out of hand. 

Hire An Accountant Or Bookkeeper

While understanding your business's finance is important, you likely won't have time to become an expert, so hiring an accountant or bookkeeper can help! A good accountant or bookkeeper can help you stay organized and save money in the long run. They can keep track of your income and expenses, help you prepare for tax time, and offer advice on how to manage your money more effectively.

In addition, a good accountant or bookkeeper can also spot potential problems and help you avoid them.  You'll be glad to have invested in this area of your business when you experience a stress-free tax season and an organized forecast into the next fiscal year. 

Equal-1 Fundid Recommendation: With Bench, you can get your overdue books caught up, your taxes filled on time, and access to year-round support and unlimited advisory. Bench simplifies small business finance by making finances simple, effortless, and affordable. Save 30% on your first three months!

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Ask For Help

Of course, there sometimes isn't room in the budget yet to hire an accountant or bookkeeper, but that doesn't mean you have to do your small business finances alone! Plenty of people out there are more than happy to offer their advice. Whether you're looking for help with budgeting, cash flow, or something else entirely, don't be afraid to ask for help from those in your network. There are plenty of resources available, and you'll be surprised how much you can learn from other small business owners. 

Did you know you can ask a Fundid expert for advice too? Leave us your questions, and our team will get back to you quickly!

Grow Your Business With Fundid

These are just a few tips to help you get started with your small business finances. Remember, it's important to keep track of your expenses, make a plan and stick to it, invest in yourself, and don't be afraid to ask for help when you need it. If you are looking for additional resources, check out our growing database of Growth Partners, where you will find exclusive discounts just for Fundid members! 

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Editor’s Note: This blog was originally published on November 23, 2022, and has been updated for accuracy and comprehensiveness