Five formulas manage business finance for new businesses

By | February 4, 2017

For those who are in the first step to start a business, financial arrangements need to be disciplined in order to know how far the effectiveness of the use of capital and the level of sales turnover.

personal account

Intention to own and run a business is usually accompanied by a number of proprietary capital to drive the wheels of business.

However, the size of the amount of capital should not be an obstacle to entrepreneurship. Enterprises can run adjust existing capital, start small.

Many of the new entrepreneurs who run their business started the moment has become an employee, working in an agency or company. Initially, drive a regarded as a side business venture alone.

Side business with a small capital should still run with stability and seriousness.

Businesses with little capital may have a large turnover if the business activities really wrestled well, including in terms of regulation and financial management in it.

There are a few tips on how to manage finances in entrepreneurship, especially for those who just plays as a prospective employer or a new employer.

1. Separating the business money and personal money

Business owners also play a role as a worker in the business is run. Therefore, business owners must still provide profit allocation to pay himself.

With a system like this then businesses will only spend money on his salary alone for personal business. The size of the salary for the business owners depending on profits. So in running the business, still create two separate accounts, even though the business carried on is relatively small scale

2. Make a plan for use of money

Capital could be money or other than money. To start a business, the availability of capital is crucial. Capital money is usually used to buy raw materials and equipment needed for the passage of a business.

Capital needs are better taken from their own capital so that there is no risk owes to other parties.

The moment has benefit, the use of money also must be taken into account although for business expenses.

Planning the use of money to avoid a situation of lack of funds. Do not spend money even though the position of excess cash balances. If you have capital expenditure plans, to consider the benefits, whether to increase sales.

3. Books financial records

It’s important to have a financial plan so it does not run out of cash and had to close the business. Notes out of money in real terms. It contained only records of money in and out of the various posts.

Financial records separate business like this is so that business finances can be easily monitored and recorded neatly so it can be used for various purposes.

In addition, business owners will know clearly how much of its business assets, how much profit and so forth, so as to know the development of business, which he founded. At a minimum, there should be financial records is a cash book entry and exit cash book.

4. Managing cash flow

In the system of self-employment, it would be wise to run a business is not only focused on profit alone. Management and financial management includes capital money management, debt, receivables and inventories.

To be more effort to walk so that cash flow can continue to spin, then the system is boosted sales. In the item product sales profits may be little, but if it is able to sell a lot, then the cash flow smoothly rotates. Instill the principle of profit slightly but was able to sell a lot of products.

5. Controlling and checking assets, debts and capital

Checking finances needs to be done to know the stock of goods to be sold to consumers. In addition, it is also necessary to check the bills of the suppliers and receivables from buyers. This is done to prevent the bill is jammed or double payment.