When you start a new business, you kickstart a whole lot of financial and accounting tasks that might be over your head. Keeping up with your business finances can be intimidating and downright frustrating for entrepreneurs who didn’t major in finance.
So how can you get more comfortable with managing your business’s day-to-day financial needs? The good news is there are actually a lot of steps you can take to help you feel a little more at home among balance sheets and financial jargon.
For the new small business owner, here are a few ways you can get acclimated to the financial world of running a small business.
Invest Time in Learning the Basics
Even if you took an accounting or finance course back in college, you may not have the firmest grasp on all the basics around your business’s finances. That’s why it’s important to invest some time in learning or relearning basic financial vocabulary and foundational principles.
Now, it’s 2016, so you don’t need to head down to your local university and sit in a classroom. There are tons of online courses you can take at your own pace and from the comfort of your home office. Not to mention, many of those courses are either free or super affordable, even for a new entrepreneur. Check out Udemy to find a course on almost any aspect of finance you can think of (our pick: Business Happens) or head on over to Grasshopper Academy and peruse Financing Your Business.
You’ll be amazed how much more comfortable you’ll feel dealing with small business finances just from understanding the lingo and how to put together some simple projections.
Get Educated About Funding
A big part of having healthy business finances is about getting the right type of funding, right when your business needs it. But with all the choices out there — bootstrapping, bank loans, crowdfunding, equity financing… etc. — how can you know which is right for your business?
The answer is to do your research and get educated. How to get funded, when to seek out additional funding, where to look for it… these are all problems that the vast majority of small business owners face. That means there are tons and tons of resources to help you through it.
The first step is to determine whether or not you actually need additional funding yet. Once you’ve figured that out, take a look at all the funding options available to you, and weigh the pros and cons of each. When you’ve done all the research, you can be comfortable making an educated decision about the best option for your business.
Nothing breeds confusion and frustration more effectively than disorganization. It’s tough to feel comfortable with your finances when forms, data, and account numbers are in a million different places. That’s why keeping everything organized and accessible can go really far in helping you feel more comfortable with financial decisions.
The first thing you should do is create a budget for your business’s expenses and projected income. Having a solid guesstimate of how much you’ll be spending and earning each month will help you rest easy knowing you can cover your expenses.
The next step is to develop a process for tracking expenses and payments. These are the small, everyday tasks that can crowd your brain and seem like a bigger deal than they really are.
Stay on Top of Taxes
If you’re a veteran entrepreneur, you know that tax season can bring big surprises if you’re not paying attention to quarterly taxes. To avoid a big surprise in April (and dread of the unknown leading up to it), make sure to stay on top of what you owe for federal and state taxes. It’s best to plan and budget for paying your taxes each quarter, instead of one big payment during tax season.
Along with staying on top of what you owe, be sure to keep track of all the expenses and other items you can deduct from your taxes, like home office costs, charitable donations, and career training.
Lastly? Don’t be afraid to ask for help. Taxes are a complicated and ever-changing realm, so it’s totally okay to hire a professional to help you manage this part of your business finances.
Let Software & Tools Help
No one said you have to manage everything on your own. There are a crazy number of tools and resources available to make handling small business finances as hassle-free and time-efficient as possible.
Choose a tool to keep track of your everyday bookkeeping needs — that includes sales, invoices, receipts… everything you need to manage on a day-to-day basis. Accounting tools like Wave, QuickBooks, and Xero are great options.
You can also find software to help with budgeting and forecasting. Take a look at resources like Budget Maestro, Rubberstamp.io, and Adaptive Insights. These will help you create intelligent budgets based on insightful projections, so you can get it right the first time.
Know When to Outsource
The key to getting comfortable with anything foreign is knowing when to ask for help. You aren’t a finance professional, so the smartest thing to do when you’re unsure is to seek advice from someone who is.
Whether it’s something you’re confused about or just don’t have the bandwidth to focus on, it’s one hundred percent okay to outsource financial tasks. Remember: your #1 job is to run and grow your business — if navigating complex financials is hindering that, hand them off to someone else.
Some of the tools mentioned above give you access to tax and financial professionals to help with everyday problems. You can also hire a full-time or contract accountant to handle the whole shebang.
The world of business finance is foreign to a lot of people. Besides finding comfort in not being alone in your discomfort, the steps above will have you well on your way to managing your finances and the intimidation they can bring.
Now that you can handle your small business’s finances, you can get on with growing your business and changing the world, one customer at a time.
For more info on financing for your business, check out what the experts had to say in our Fireside Chat.