Whether you’re planning on expanding your business or simply reaching your targets faster, one of the core areas you need to focus on is your finance. Finance is the fuel of any entrepreneurial journey, and that’s why its proper management is critical to the growth and success of your business.
Although it’s not easy to be on top of your finances, especially given the fragile nature of the current economy and business environment, it’s possible to achieve that by making certain critical financial choices, which include the following:
Improve your bookkeeping
Bookkeeping is important to business because it makes it easy to stay organized, budget, measure your performance and so much more. If you want to improve your business today, you need to start by assessing and optimizing your bookkeeping as necessary.
Firstly, go through all your numbers starting from last year, and combine the data with the forecast of your future sales to understand your current position. For instance, you may have not attained your goal of impressing your stakeholders with a great performance last quarter, which means that you should go through your accounting data to know where you can cut your costs.
Make sure your bookkeeping and accounting practices are done to perfection, without letting any financial records fall through the cracks. Of course, this requires using the right tools. You can utilize applications like Xero to link your apps and bank accounts, and carry your whole bookkeeping process. You can even adopt automation tools like Zapier to help you log data, send reports to your accountants and receive notifications from your apps.
Make sound financial investments
Growing a business requires you to make certain financial investments. For starters, you need to invest in a good team. Doing so can boost your productivity and help you establish the right company culture to attract the right employees. You should therefore consider reinvesting your profits on initiatives, such as employee development and human resource management, to make sure you get the right team.
Secondly, you should invest in the right marketing techniques, such as marketing performance metrics. You should always track your campaigns and make the necessary adjustments over time to make the most of your efforts. You can always outsource to a professional marketing agency if you don’t have the right skills or experience to handle your marketing in-house.
Lastly, you can invest in quality communication processes, such as first-rate on-hold messaging services. According to a survey, 60% of customers hang up when they’re put on hold for only one minute. That means that your business may be losing more customers than you can imagine to hang-ups. Clearly, investing in a good messages on hold (MOH) service provider to help you craft great audio messages for your callers and customers can help you retain most of your callers and improve your business tremendously.
Make wise debt decisions
Business owners usually seek out debt to help them construct their capital structure, and keep profits within their business while securing tax savings. You too can choose debt over equity because it generally requires a lower financing cost, retain profits because you only have to pay interest out of your profits, and get interest deductions leading to tax savings.
Tax savings, as you know, can help you reduce your business’ debt financing cost, an advantage that you cannot find in equity financing. Unfortunately, debt may threaten your company’s finances, especially during difficult times.
Remember that you have to repay debts regardless of your cash flow situation. What’s worse is that relying on debt financing can lead to lower cash flow because of the interest payments and the principle that has to be made on the debt. You also risk paying higher interest rates the more you borrow due to having a negative credit rating.
Therefore, although debt can be great for the growth and success of your company, you need to secure it only when you need to, and after making an in-depth assessment of your company’s current and projected future financial situation.
Focus on Customer Experience
Lastly, invest in customer experience. Among other things, create platforms to allow you to receive more feedback from your customers to allow you to make better decisions when it comes to optimizing your service delivery. Since your customers know best what they want, pay attention to what they have to say regarding your service, and improve accordingly.
Are you ready to boost your business and achieve your target bottom-line today? If you are, then work towards improving your bookkeeping, making wise debt decisions and other financial investments as discussed in this article.