Running a small business can be challenging, especially when it comes to managing finances. However, you need not worry. In this article, I share some simple yet effective financial tips to help small business owners navigate the financial waters. Ready? Let’s begin!
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Keep a Close Eye on Your Spending
It’s like keeping a diary for your money! Whenever you spend money, whether it’s for big things like buying equipment or small stuff like buying pencils, write it down. This way, you can see exactly where your money is going. Maybe you’ll notice you’re spending too much on snacks or things you don’t need. Writing it down helps you figure out where you can spend less.
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Make a Money Plan (Budget)
Imagine your money is like puzzle pieces. You want to fit them together in the best way possible. That’s what making a money plan, or
budget is all about. Think about how much money you have and how you want to use it each month. Maybe you need to set aside some for rent, some for buying new things for your business, and some for emergencies. Making a plan helps you smartly use your money so you don’t run out too quickly.
Picture your money like water flowing in and out of a bucket. Money flows into your business when people buy things from you. But then it flows out when you have to pay for stuff like rent, supplies, and paying your employees. You want to make sure the water (or money) keeps flowing smoothly. If too much flows out, you might not have enough left to keep your business going.
Imagine your money is like a big tree. You want to trim off the branches that aren’t helping the tree grow. In business, you want to find ways to spend less money without making things worse. Maybe you can find cheaper places to buy things, or use less electricity to save on bills. By finding ways to spend less, you can make your business stronger.
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Don’t Forget About Invoices
When you sell something to someone, you give them a piece of paper called an invoice. It’s like a reminder that they need to pay you. Sometimes people forget or take a long time to pay. But it’s important to keep track and remind them nicely if they forget. You want to make sure you get paid for your hard work!
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Save Some Money for Emergencies
Just like how you keep a first aid kit for accidents, it’s a good idea to have some money set aside for unexpected problems in your business. Maybe your computer breaks, or the roof leaks in your shop. Having some money saved up helps you fix these problems without stressing out too much.
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Try Different Ways to Make Money
Imagine your business is like a big garden. Instead of just growing one type of plant, you try planting different ones to see which grows the best. In business, you can try selling new things or offering new services to make more money. This way, if one thing doesn’t work out, you have other ways to keep your business growing.
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Think Before You Spend Big Money
Imagine you’re at a store and you see a shiny toy you want. Before you buy it, you should think about whether it’s worth spending your money on. In business, it’s the same with big purchases like buying new machines or spending a lot on advertising. You want to make sure it will help your business make more money before you spend a lot on it.
Taxes are like a bill you have to pay to the government for running your business. It’s important to set aside some money each month to pay for taxes later. You don’t want to be surprised by a big tax bill and not have enough money to pay it!
Imagine you need to borrow some money from a friend. Before you do, you should think about how much you need and if you can pay it back. It’s the same with borrowing money for your business. There are different ways to get money, like loans from banks or asking people to invest in your business. Make sure you understand how it works and choose the best way for your business to get the money it needs.
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Final Thoughts
By following these tips, small business owners can have better control over their money and make their businesses stronger in the long run. Remember, managing your money well is key to keeping your business sailing smoothly!
Got a suggestion? Contact us: editor@connectnigeria.com
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This article was first published on 11th May 2024
chidiogo-akaelu
Chidiogo Shalom Akaelu holds a degree in English and Literary Studies, from the University of Nigeria. She is a freelance writer, editor and founder of Loana Press, a budding online publishing outlet.
Comments (1)
thank you for post guy very