You’re a small business owner. Like the rest of your contemporaries, one of your main priorities is to ensure that you have a steady cash flow. That’s not always easy, but there are ways to manage your money, even in uncertain times. Here are a few tips.
Take care of your employees.
Your employees are, without question, your most valuable asset. After all, without the right team members in place, your business will not run efficiently or effectively. Take care of the people that take care of you by being a good employer. This starts by providing a comprehensive benefits package. You’ll also want to make sure that your employees have a competitive salary, paid time off, and other perks that will keep them focused on you instead of other employers in your industry. RPPC Inc. can take this huge responsibility off your hands with comprehensive payroll services.
Although it does cost money to attract and hire the best talent, it costs more if you get into a cycle of continual turnover. It can take around 6 months for a new employee to reach full productivity. This means it could be half a year before you recoup the cost of hiring and training. However, if you are having to input new people every six months, you may never make a profit on your talent acquisition investment.
Streamline your finances.
Obviously, you want to watch how you spend your money, but you also want to keep a close eye on how you manage it. Better yet, you can work with a virtual CFO to do this for you. Create a solid financial foundation by keeping your cash in a business bank account that will integrate with the services and systems you already use. Ideally, you’ll be able to handle everything from employee direct deposit to bill pay directly from this account while also earning a high interest rate and paying fewer or no fees for services like ACH transfers.
To keep up with the digital age, you should also be able to manage your finances on the go, whether you’re using a desktop computer or your mobile devices. Batch invoicing software like Quickbooks can make tracking your business expenses easy so you can keep better records of transactions, which, in turn, keeps you prepared come tax time. Plus points if it easily integrates with your business bank account.
Now, because of the sensitive nature of the information in your accounts, you must learn cybersecurity best practices in the office and everywhere else. For your phone , this means keeping things locked, setting strong passwords, and making sure that your software is up-to-date. Also, only log in to secure networks and encrypt all smartphone data.
Watch your loss leaders.
Marketing Principle explains that a loss leader is a product that holds value to your customers but that might not make a profit. Loss leaders are a smart way to entice your customers to reach deeper into their pockets. These products serve as a beacon to attract their attention in the hopes that they also purchase complementary or alternative products that will push your profits toward the green.
Using a loss leader is an excellent way to retain customers – but only if you have enough products and services to upsell. It’s typically wise to limit your profit-consuming goods to no more than one or two items. And given that you are also paying to store inventory , limiting your loss leaders to those that are most effective can keep you from overspending. You can then channel funds into other areas of your business, such as operations or marketing.
Smart money management is not just the result of how much you earn and spend. To maintain your profits, you must look at the financial aspects of every area of your business, from how you hire to where you keep your money to what products you’re using to draw attention. While the above ideas aren’t your only considerations, they’re a great start and are probably actions you haven’t considered as having a significant impact on your bottom line.
RPPC Inc. is available to help you with your accounting and payroll needs, as well as guide you in making the most out of the Quickbooks platform. Get in touch for a consultation.
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