Here’s A Quick Way To Solve Income Insecurity As A Business Owner
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Do you own a business and are having a hard time making reliable forecasts and knowing exactly how much money you’re going to have coming in each month? For many business owners, this is one of their biggest issues.
In this article, we’re going to look at one of the best ways to help turn your finances around and make your balance sheet much more secure moving forward. Along with this one key tip, we’ll also look at a few other ways to protect your sales figures during an unpredictable business climate.
Making sure you know how much money you’re going to have coming in from month to month is important. Sales can fluctuate a lot, but you need to know what you can afford. Maybe you want to know if you can take on a new member of staff or move to a new premises. You can’t make these sorts of strategic decisions for your business if you don’t have income security. So what can you do about it? Let’s have a look…
Get A Qualified Accountant
This is the best first tip for your small business. While many small business owners like yourself might try and do their books themselves, they often won’t have the expertise and experience to really spot holes in your finances.
Another mistake is hiring a regular bookkeeper. These are great for keeping records, but not if you need actual financial advice. That’s why a qualified accountant can really help. They can spot ways for your to save, protect cash flows and ultimately make your income more secure. While accountants might be a bit more expensive, they’ll soon pay for themselves.
Remember, if you’re a small business you don’t have to hire a full-time accountant. You can use one of many accountancy firms to get advice on an hourly basis. It’s normally more than worth it, and you could find new ways to save and make money.
Get Income Insurance
Another way to make sure your income is secure at all times is with a bit of insurance. This will cost you a bit, but it might be worth it to make sure your major outgoings are protected. You can compare policies for this sort of thing online.
Look for financing options
If you don’t have the cash flow to make important strategic purchases in order to really help your business grow, you might want to try and find some financing options. These could be in the form of a bank loan or even capital from investors in return for a percentage of your business.
Agree To Long-Term Contracts With Clients
One way to make your finances more secure and have a better idea of how much your business might be making each month is to agree to longer-term contracts with clients. Then you’ll be able to forecast each month and will know when your business will be making money—and how much.
Another could idea with this is to try and schedule work with clients further down the line at times you know you’ll otherwise be quiet. If possible, take on future work with clients who are happy to wait so you can fill up the calendar when your current workload has finished.
Pay Yourself Less
As the business owner, you might think you deserve to get an executive level wage. But what if you can’t afford it? Sometimes you might have to just eat a bit of humble pie and pay yourself a regular wage, or even less if the business is struggling.
If you really want your business to be a success, you might have to take a pay cut in the short-term. Remember, if you get a bit of extra money into your business sporadically you can always pay yourself a bonus in the form of dividends instead.
Have you managed to solve your income insecurity as a small business owner in 2019? We’d like to know how you did it, so share your tips in the comments section below the line.