What Smart Business Owners Know About Money
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If you own a small business, then you are familiar with the constant struggles to drive sales and grow profits. However, some business owners make it look easy. What is it they know that you don’t? The answer is quite a bit. Smart business owners know that money is one of their most precious resources. They are constantly taking stock of ways to get the biggest bang for their buck – quite literally. With that in mind, here is a quick list of what smart business owners know about money.
Time is Money
Yes, it is your money but sometimes the best option is to pay someone to do a particular job for you than to do it yourself. There may be several reasons for this. Maybe someone, or something (don’t forget software), can do the task better and faster than you. Or maybe it is something you know, but you could do something better with your time.
In each case, it is important that you manage your time wisely. Think of each block on your schedule as an investment and ask yourself if can have a bigger impact on your business’ financial position by doing it yourself or by paying someone else do it. Doing so will force you to reevaluate what you think is important by justifying how you are spending your money.
Use Your Accounting System
It doesn’t matter if you use excel or FreshBooks as your accounting system; you have to use if for the system to be of any value to you. This not only means making sure that all information is up-to-date. But more importantly that you can pull information from the system which will help you make the most of your money.
Accounting is not just for the tax man, when done right it can provide valuable insights into how your business works. Take for example a cash flow problem. A properly functioning accounting system will help you to identify the source of the problem and to figure out the best ways to solve it.
You want to base your decisions on facts and using your accounting system is one of the best ways to do that.
Pay Attention to Your Operations
As mentioned having an accounting system is important but to make the information actionable, you need to understand how your business works. This means paying attention to your operations.
Start by asking yourself a few simple questions. Do you know your customers and what they expect? Are you consistently exceeding their expectations? If you don’t know the answers to these questions, then you are in trouble. Sure, your business might be growing today. But what if a competitor opened across the street? How do you know if you will be able to win? Smart business owners pay attention to their operations as they know making money is not always about price.
Hire the Right People & Train Them Correctly
You shouldn’t need to babysit your team. If you do, then it is you who is doing something wrong. The best small businesses out there know that more than anything they are in the people business. This starts by hiring the right people. Sure, this can be tough but you want to make sure whoever you bring into your business is not looking for a paycheck alone – they are looking for a chance to work hard and grow.
Ok, so you have hired the right people, but did you know that without proper training the right people can easily become the wrong people. Smart business owners know that the single most important day for any new employee is their first day on the job and therefore they take the time to train them correctly.
Guess what, you can see the results almost immediately. Proper training helps to develop a team which is engaged and willing to go the extra mile. In addition, the team will have a better understanding of those factors which are most important to the business and this will result in more profitable operations.
Understand the Value of Money
Lastly, smart business owners should understand the value of money. They are mindful of every dollar they spend, especially if it means paying thousands more than they should. For example, by prioritizing your business credit score and choosing the right loan to fit your business model could help you get a business loan without collateral. This protects your personal and business assets and can save you money in the long run.
Understanding the value of money starts by prioritizing what is most important to the profitability of your business and then focusing on ways to reduce costs or increase efficiency. By doing so, you will find that you have more money than before.
Photo courtesy of: Unsplash
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