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5 Steps to a Thriving Small Business

It can be challenging and rewarding to start and run a small business. Small businesses succeed by maintaining a healthy financial position. A small business' finances include much more than just tracking expenses and generating invoices. They also include managing cash flow and making smart investments. If you are struggling with managing your business' financial situation, don't feel defeated because it is common. In fact, the median small business has a net profit of only $7.00 a day! For small business owners looking to improve their financial management skills, we have some helpful tips and resources for you. Whether you're just getting started or you've been in business for a while, these strategies can help you make the most of your finances and help build a thriving small business.

  1. Keep accurate and organized financial records: One of the most important things you can do to manage your small business finances is to keep accurate and organized financial records. This includes keeping track of your income, expenses, and any other financial transactions. You should also make sure to keep all of your receipts and invoices, as these can be useful for tax purposes and in case you need to verify any of your financial records. Instead of trying to keep track of all those pieces of paper, there are phone apps like Adobe Scan or Microsoft Lens that turn your phone camera into a scanner and you can then save those receipts as PDFs to your preferred cloud storage like Google Drive, OneDrive, or Dropbox.

  2. Create a budget: Developing a budget is a crucial step in financial management. A budget can help you track your income and expenses, identify areas where you may be overspending, and make a plan for how you will allocate your financial resources. If you are just starting out or planning your business, your local library may have excellent resources to help you research the typical cost of various things in your area. If you have been in business for some time, your best starting point for your budget is the expenses and income you have had within the last year.

  3. Make use of financial tools and software: There are many financial tools and software programs available that can help you manage your small business finances more effectively. These can include accounting software, invoicing software, and apps for tracking expenses. When you are first starting out, a free account with Wave Apps can be a huge help. There are also some very affordable plans using websites like Xero or Quickbooks Online. Don’t forget to get a mileage tracking app for your phone like MileIQ also. You want to be able to take advantage of business tax deductions and MUST have a record of any business mileage in order to claim vehicle expenses at all.

  4. Seek out financial advice: If you're not well-versed in financial management, it can be helpful to seek out advice from professionals. This could include working with a financial advisor, bookkeeper or accountant, or even just consulting with a trusted business mentor or peer.

  5. Take advantage of financial resources for small businesses: There are many resources available specifically for small businesses that can help with financial management. These can include education, grants, loans, and other financial assistance programs. Many small business owners do not realize that they can access FREE training and information on both the IRS and Small Business Administration websites. Don’t forget to talk to your local library also. They are often a fantastic source of information and have tools and resources to help you! It's worth taking the time to research what options may be available to you.

All of this can be overwhelming but just remember: if it was easy, everyone would be doing it… and you can always reach out for consultations or assistance from Eaton Business Solutions!

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