- On October 31, 2019
Most young businesses are ambitious and focused on their goal of creating brand awareness and product launches. Often, what they end up neglecting are the business finances, especially if the founders are not business graduates or financial specialists.
Startups and new businesses are most prone to run into bankruptcy in their first year. A major reason, among others, is that most people don’t really understand finance and how it works. Though they want to maintain their financial records and keep a vigilant eye on them, they don’t really know what they’re looking for.
We get it; finance is hard. Number crunching isn’t everybody’s thing, and it might take you a lot of time to learn how to read your financial documents and how to correct them. Oftentimes, you just can’t afford to make mistakes.
Healthy Financial Habits to Adopt
If experienced business owners and finance gurus could give you financial advice, what do you think that advice would be? What habits can you inculcate in yourself and your business practices that can guarantee your business’ sound financial health? Listed below are 5 habits that all healthy Melbourne-based businesses need to adopt.
1. Separate Your Business and Personal Accounts
Separating personal and professional lives and separating personal and official bank accounts should be your motto. It’s the first of many habits to learn when you start a business. Keeping both accounts simultaneously, especially if finances from both are used in the business, will create confusion and lead to overspending.
Separate accounts are cleaner and more comprehensible. It is easy to assess and analyze how your business is doing, how much it’s earning, and how to allow finances to different functions.
2. Know-How to Read Financial Statements
You can’t become an expert overnight, but you can learn the basics of financial information to understand what’s going on with your business. Know the types of financial reports and ratios available and what their relevance is. If you can’t do it on your own, hire someone who has knowledge on the topic – a professional in the field would be your best option here.
3. Educate Yourself about Financing Options
Inquire about the financing options available to you within Melbourne if you project that you might run into money problems in the future. Don’t leave this for the end moment, when your business is already knee-deep in debt. Collect information beforehand, so you can act preemptively when the time arrives.
4. Have a Backup
Keep a separate bank account that will give you security when financial trouble befalls you and your business. The emergency account will help your business get by and bear the necessary expenses through the difficult times until you have more money at your disposal, and your financial worries are over.
5. Get Help from Accounting Services Providers
Investing in professional accounting services or bookkeeping services is the smartest thing you can do when it comes to securing the financial health and future of your business. Not only will such professionals be better at managing your finances than you are, but it will also take the stress off you so you can focus on the sales, marketing, and other important aspects of your business.
Adopting a few of these habits will go a long way in securing your business’ future. They will also save you from financial woes and threats, so you can focus on things other than simply keeping your business afloat. Or better yet, you can hire someone who provides accounting services, and they’ll take care of it for you.
ThinkWiser can take care of all of your general bookkeeping, accounting and compliance needs. Our dedicated team of experts can help you in managing and understanding your numbers. This enables you to spend more time growing your business.
Schedule a free consultation with our experts.