Starting an SMB from Scratch – 5 Major Financial Precautions. Launching an SMB requires covering several bases before you start working on your first business task.
One of the most important aspects of every SMB-management is the financial part. Payment processing, carrying out accounting activities, and tracking your transactions are only some things you need to pay attention to.
SMB-owners need to save money, as well, to invest assets in their growth and to put some cash on the side, as well.
In this article, we present the major financial precautions you need to bear in mind when starting an SMB.
1. Handling accounting features
Every single payment paid by and to your business needs to be properly recorded in your books.
If you don’t handle too many transactions per month, you could enter them manually into your accounting software. However, the truth is that nobody does that anymore today.
What you should do is link your business bank account with the accounting tool you opt for.
On the one hand, you’ll avoid the risk of making a mistake when entering data manually.
On the other hand, you’ll be able to automate some features, like invoicing and recurring payments, as well as to track your transactions in detail.
Another valuable benefit of this linking is that you’ll be able to generate a tax return directly from your accounting software, since each and every payment will be registered in it.
2. Dealing with expenditure
Becoming a business owner doesn’t mean that you can immediately act like a drunken billionaire and splurge your assets without control.
What you should do is completely opposite: you should keep an eye on every single cent and spend money only when it’s really necessary.
In that light, apply the following tips:
- Postpone renting an office. If possible, work from home or go to a coworking space, at least while you still don’t have to hire additional workforce.
- Ask suppliers for longer payment periods. Sometimes suppliers are willing to extend their payment periods for reliable business owners. Once you get to know each other, use this opportunity and ask for longer payment periods or installment payments.
- Avoid hiring full-time employees. Full-time workers incur a lot of additional expenses. For starters, rely on freelancers, part-time contributors, and other temporary staff. As you land more demanding projects, form a core in-house team that you will hire on a full-time basis.
3. Using free digital marketing tools
The power of digital marketing is huge. If you know how to present your business to your online audience, you’ll generate more leads than you hoped in the first place.
The more leads you create, the more probable it is that they’ll convert into buyers.
In terms of digital marketing solutions, you should start with a free keyword research tool. It will show you what are the most common keywords used by your rivals and by your potential customers. When you know this information, you can create the right content strategy for your business.
Social networks are the next checkpoints on your road to digital marketing success. Every company can launch a business page for free on all social media.
Once you’re there, you can use dozens of different parameters to target your potential audience on Facebook, Instagram, and other social media.
You can launch different promotional campaigns via these media for free, as well.
Also, there are paid ads that can give an additional nudge to your business and make it more visible on the Web.
Moreover, use Google Analytics to track what’s happening on your website and how users react to its content.
4. Turning to valuable visuals
When you’re setting your business budget, don’t omit your business visuals: videos, photos, stock images, infographics, and graphs are only some of these valuable elements.
New SMB-owners should combine stock photos with their own original business images. As time goes by and you have more things to offer, you should gradually increase the use of in-house photos.
As for videos, an explainer video is a welcome addition to every homepage today. It can explain to your potential clients and partners what you do in a concise and easily understood manner. Also, don’t hesitate to add other videos to your website and other digital channels your business is present in.
Whenever possible and necessary, enrich your website with infographics and graphs, as well. They will help you deliver information to your readers in a more attractive way.
Still, when adding visuals to your website, bear in mind its functionality and visual appeal. As explained by UX designers from a Houston web design company, too many elements on a business website might be distracting.
So, make sure that all the visuals that you place on your website offer extra value to the surrounding content.
5. Saving assets
As you start making money, saving assets should become one of your top priorities.
For that purpose, you should open two separate savings accounts: the first one will serve as an emergency fund, and the second one will be for long-term savings.
You can use the assets from the emergency fund only during a low tide in terms of business projects and earnings. They shouldn’t be spent on current business affairs.
The money saved on the long-term savings account shouldn’t be used even in the case of emergency. Its purpose is to make larger investments in your business when the time comes.
If you’ve decided to enter the SMB-playground, bring all the things you have, and don’t be afraid to start playing with larger players. Still, keep a good eye on your finances and don’t spend more than necessary. Use free tools whenever possible to promote your business. Pay promotional solutions when you think it will be beneficial for your business, as well, and don’t overdo with your own creative details.
Finally, save your assets to be prepared if anything unexpected hits your business.
If you follow all those financial tips above, you’ll start your business story in a steady and promising way.