As a small business owner, you are in an especially precarious situation with regard to cash flow and budgeting.
As you know, it never pays to bury your head in the sand when it comes to finances. If you haven’t been paying enough attention to your business budgeting, it’s definitely time to start now.
Here are some issues you might be facing, along with strategic ways to handle them….
Running Out of Cash Before the End of the Month
This is a classic symptom of poor cash flow. If you’re consistently running out of cash before the end of the month, it’s likely that at the beginning of each month, you’re playing catch up on the bills you couldn’t pay last month.
This in turn will leave you short for the current month.
It’s a vicious cycle that will repeat endlessly unless you’re able to pay your bills ahead instead of in arrears.
Though the answer is counter-intuitive, the answer is to borrow money.
Borrowing money will enable you to pay your bills forward, protect your credit, and give you some breathing room while you figure out a way to increase your business income permanently.
Your Loan Selection Does Matter
The type of loan you get matters.
Instead of going for a no-credit loan that gets repaid with future business receipts, try going for either a collateral loan, or a personal loan based on your income.
No-credit loans repaid with receipts are fine for some purposes, but in this case, the repayment style would defeat your purpose.
A personal loan or collateral loan is repaid in the traditional way, with payments coming out of your business checking account each month, which is what you want.
For more about personal loan options, check out this article about 9 methods for budgeting success.
You Need Help but Can’t Afford More Payroll
Payroll is an expensive liability when you consider that you have to undertake a long-term commitment, plus manage payroll taxes and possibly health insurance. If you’re already having budgeting problems, you’re better off not hiring anyone right now.
A better strategy is to hire out work on as as-need basis to subcontractors.
Subcontractors are not your employees, so you aren’t responsible for insurance or payroll taxes.
You simply agree on a price for a specific task, and when it’s done to your satisfaction, you issue payment.
You can find subcontractors online at places like ODesk or Elance, or you can call local businesses to see if they have workers available for contract work.
Some ways you can use subcontractors are:
- Virtual Assistants
Basically, anything you might need for your business, you can probably find someone to do for you on a contract basis.
Stop waking up in the middle of the night with budgeting nightmares.
Use these strategies to take control of your business finances once and for all.
About the Author: Kate Supino is a successful small business owner and expert on best business practices.