Small business finance: 3 important things to know
At Zenith, we look after financing for all kinds of businesses, great and small, and they each have many common traits.
But if you run – or are looking to start – a small business, it’s important to understand that directing your finances and energy to the right places is crucial – because with smaller input costs comes smaller profits, so there’s less room for error.
Here are three profit-friendly tips you should seriously consider:
Work smart, not (as) hard on your finance strategies
In a small business environment, it’s easy to get caught up in the minute day to day details of your organisation, when you should be focusing on broader financial strategies that provide direction towards your overriding goals.
Many of our SME clients tell us that the biggest benefit we provide for them is not low interest rates, but finance and leasing strategies and plans designed to their individual strengths and weaknesses. It’s allowed them to work towards their goals on the back of their forte, and over time boost the areas where they may have been limited.
Ultimately, your financial decisions should be about carefully considered goals, values and resources (both skills and capital).
It usually pays to outsource
While you want to be frugal when starting out, as the business grows there just won’t be enough hours in the day to do it all and run your business efficiently.
If you find yourself in a position where you can afford to hire staff, great, but in the early days you may not want to be burdened with all the costs that staff bring beyond wages, such as superannuation, holiday pay, bigger premises, extra insurance etc.
While you won’t have the same control, outsourcing for specialist skills, services or products (especially in your weak areas) can save you a lot of time and money.
Build your network fast
Even if crowds are not your thing, or you don’t have the gift of the gab, networking is really important for small business owners.
From a financial standpoint, building a diverse network of people within your industry and different fields can help fast track your business and profit growth – whether you share ideas, skills, marketing or referrals.
And you certainly don’t need to be the social type to do it well. Just think of it as having a chat about something you enjoy (your business) and along the way meeting people you can help, and who can help you.