Manage Your Business Finances Before It’s Too Late

Are you managing your business finances or are they managing you?
A leading cause of small business failures is a lack of money. Many businesses will run out of money before getting a chance to really test out their product or service in the market. It’s easy enough to conclude that if you run out of money and cannot afford the tools and advertising you need to build your business that you are not going to get very far.
So how do you avoid the pitfall of letting your business finances run you out of business?
There are 2 main areas I’d like to focus on, that if given the proper attention, should help keep your business financially afloat and lead you to success.
  1. Budgeting

    It’s not always easy to create a budget for a new online business. However, if you get too far along without properly budgeting your expenses you could quickly run out of money and be out of business before you know it.  In the simplest terms, a budget is a spending plan. To make sure your business gets past it’s infancy and moves towards long-term success. money going out must be less than money coming in. Some of you may have money available to spend even if you have no income. That may work out for a little while but can’t go on forever.  Here are a few simple budgeting tips that will help…
    1. Plan to spend what you can afford even with little or no income
    2. Put your budget in writing
    3. Track your actual results against your budget
    4. Adjust your budget if your situation changes
  2. Business Spending

    It is irresponsible to expect to launch a business without spending any money. With that being said, we are fortunate to be in this Network Marketing industry where so many tools and resources are available online for little or no cost. When it comes to running an online business there are a few major outlays you can expect in most cases. First is the actual cost of the program or business you are running. Many businesses require an upfront cost to get started and potentially monthly frees to remain in the business or program. Second is the cost of the tools you need to operate. These may include an email or autoresponder program, a blog or website, and some sort of customer management system. Third and perhaps most importantly is the cost of advertising. Let’s briefly examine each of these items…
    1. Program costs. Depending on the business you want to operate, this may be a fixed cost that you cannot avoid. Therefore, you must plan for these costs as the top item in your budget. Examples might be the upfront cost of a direct sales kit, or the monthly cost associated required education or other program fees.
    2. Operating tools. 2 tools I highly recommend are a blog and an autoresponder. If you have done any research, you know that you can spend a lot of money on either one or both of these items. However, there are many free options that you can use, at least in the beginning when money coming into your business may be a scarce resource. You may make some sacrifices with free options, but there are still some excellent choices. For a blog, I would recommend Blogger from Google and for an autoresponder I recommend MailerLite.
    3. Advertising. Well, it’s pretty hard to run a business and attract customers without advertising. Thank goodness, there are so many ways you can promote your business online for free. The absolute most effective way to do this is through Social Media Marketing. Things like Facebook, Twitter, Google+ and the list goes on, are all free resources you can use. These methods can be time consuming and must be used properly, but can bring you amazing results. Refer to my recent article Simple Social Media Marketing Tips You Can Use Today.  Once you begin to make some money you can invest in paid advertising which will free up some of your time spent on the free methods.

You may be feeling the financial crunch in your online home business as you are reading this article. Or, maybe it hasn’t hit you yet.  In any case, it’s time to start treating the finances of your business with the respect they deserve.  Proper budgeting, tracking of results and some financial discipline will definitely help get you off to a great start and keep you on track to long-term financial success in your business.

Questions? Just comment on this post.

To Your Success,

Bob Swetz

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