5 Easy Financial Tips for Your Wellness Business
Owning a small business is an exciting adventure, but it can also be nerve-wracking at times. Unfortunately, many businesses experience economic hardship, which can ultimately turn an exciting adventure into a stressful one. That’s why I’ve compiled a list of my five favorite financial tips for your small business.
Our 5 Most Popular Financial Tips for Your Small Business:
Pay yourself
ROI
Invest in growth
Monitor your money
Plan ahead
Always Pay Yourself First
Many business owners are quick to pay their new employees as they grow their business but often forget to pay themselves first. While investing in your day-to-day operations, it’s important to set other funds aside as well.
One thing to remember is that if something were to happen to you or your business, you need to have paid yourself to make it through that. After all, most small business owners start their businesses to provide themselves with financial security and stability.
Focus on Your ROI
Focusing on your small business’s ROI can provide a clear picture of what is going well and what isn’t. By calculating ROI for different aspects of your business, you can see which investments are paying off and which ones are still costing you money.
Many small business owners use ROI as a metric to understand if their new revenue streams are successful. A good ROI for small businesses is between 15 and 30 percent.
What is ROI?
ROI stands for return on investment. It is used to calculate an investment’s monetary value versus its cost.
Take the Time to Invest in Your Growth
While paying yourself is important, it’s also crucial to set aside funds for future growth opportunities for your small business. By preparing for growth opportunities when they arise, your business will continue to thrive and move in a positive and healthy direction financially. Investing in growth also allows you to work smarter, not harder.
Financial forecasting is one of the most important aspects of investing in your growth. Financial forecasting is predicting how a business will perform in the future using estimates of future income and business expenses.
Monitor Your Finances
I know this is an obvious one, but it’s crucial to your success. By setting time aside on a consistent cadence, you keep yourself apprised of your business’s finances, which allows you to plan accordingly and catch anything out of the ordinary before it can put a large financial strain on your business.
Business owners who keep a close eye on their finances are more likely to avoid embezzlement and unnecessary spending. Anyone can make mistakes, including banks. Your time and money are valuable, so reviewing your finances consistently ensures that no money is mishandled, and if mistakes were made, they can be corrected.
I work with a few excellent bookkeepers and they play a critical role in ensuring you keep an eye on your financials. I recommend meeting with them at least monthly to review the status of your P&L and Balance Sheet.
Plan Ahead & Re-Evaluate Consistently
When it comes to your business’s finances, you should always be planning for the future. While planning ahead may not always pan out as intended, it’s important to re-evaluate your finances on a routine basis. For example, if you have taken out any loans, make sure to pay off your debt in a timely fashion and ensure you are keeping track of your business credit.
Whether it’s planning for your taxes, looking to invest, saving for retirement, or handling day-to-day operations, planning for all of the above helps avoid unexpected costs and ensures your long-term goals can stay on track.
I know there are many moving parts when starting a small business, but I am here to help you. Whether you are looking to reassess the plan you put into place when you first started your business, are starting at the beginning, or just need a second pair of eyes, we can sit together and ensure your financial future is secure.
-Dr. Jennifer Bonde