5 Money Moves Every UK Small Business Owner Needs to Make
Let’s be honest, as an entrepreneur and small business owner, keeping track of the finances can feel like a major headache at times. But having a solid grip on your money management is crucial for driving growth and long-term success. But it needn’t be as complicated as you think. We’ve put together five essential financial tips that will help you maintain control of the important numbers in your business.
- Get Your Record-Keeping Tight
Accurate financial records are the foundation for controlling your finances effectively. Set up a bulletproof system for tracking every transaction, invoice and receipt that comes your way. Staying on top of reconciling with bank statements and doing periodic audits is key to ensuring your records are spotless. With an accurate window into your finances, you’ll stay compliant and make smarter money moves.
Having the right record-keeping system will also make your life so much easier. Opt for accounting software designed for small businesses, or go old-school with a seamless paper filing process. Either way, having a documented trail of all money flowing in and out provides you with invaluable insights. You’ll be able to quickly analyse areas like spending habits, receivables, and profit margins to course-correct as needed.
- Be a Cash Flow King
Cash flow is the oxygen that keeps your business alive and kicking. Religiously tracking money coming in and going out, forecasting future flows, and keeping tabs on outstanding payments owed to you and amounts you owe others is non-negotiable.
Keeping a close eye on your cash flow situation allows you to be proactive about any potential crunches down the line. Foreseeing a lean period up ahead? You can make strategic moves like reining in expenses, collecting outstanding invoices more aggressively, or pursuing a line of credit if needed. Just don’t wait until you’re caught in a cash drought to start monitoring this closely.
If needed, bring in an accountant (or business coach) for expert cash flow management advice.
- Keep Costs Under Control
Reining in expenses is one of the fastest routes to improving your profits. Pinpoint the big spending areas and get ruthless about assessing if those costs are absolutely essential. Even seemingly insignificant expenses can start diverting funds from higher-impact areas over time. Negotiate better supplier rates, ditch subscriptions you don’t truly need, and find innovative ways to reduce recurring costs.
Get serious about eliminating inefficiencies and redundancies in your processes too. Those “leaks” could be drip-feeding money away from driving your business growth. Streamlining operations, leveraging tech solutions, and outsourcing could all help you manage costs. We also suggest you do a cost audit regularly to identify bloat and make strategic cuts.
- Map Out a Moneymaking Plan
A comprehensive financial plan lays out the road to achieving your money goals.
Without a clear financial strategy, it’s easy to veer off-course from your long-term objectives. Map out financial projections for at least 3-5 years, including cash flow forecasts, revenue goals, and investment/expansion plans. Be sure to build in buffer room for unexpected scenarios. Consistently reviewing and adjusting this plan will ensure you stay laser-focused on achieving the growth you’re aiming for.
Again, if you need support in this area, professional advisors can provide invaluable guidance for mapping out your plan.
- Keep Those Books on Point
Maintaining accurate financial records should be sacred for any business owner. Develop a record-keeping system you actually use, log transactions regularly, follow proper accounting methods, and file away those receipts and invoices religiously. Periodic audits will ensure your books are legitimate and up to the required standards.
Keeping organised records isn’t just about staying compliant. It also allows you to precisely track metrics like profitability by client or inventory turnover rates. You can then use those insights to fine-tune your operations, pricing strategy, or other crucial levers based on facts rather than guesswork. Adopt secure storing methods and back up records regularly.
By putting these five money tips into action, you’ll be able to take control of your finances, make informed moves for growth, and run a thriving small business in the UK. Yes, it takes work, but making these financial habits non-negotiable will pay significant dividends in the long run.
Martin Baillie is a Business Coach and Growth Specialist at ActionCOACH Bury St Edmunds, committed to working with business owners to create sustainable, viable, profitable entities within the local community and creating 1000 new jobs in the East Anglian region through that growth.
If you are looking to increase the profit in your business while freeing up time and having a better work/life balance, there is no better time to start than now. Our business growth methodology is tried and tested, and we guarantee your results.
Contact Martin Baillie, ActionCOACH Bury St Edmunds now on Tel: 01284 334098. You can also follow him on LinkedIn, Instagram and Facebook
