When you start a small business, your goal is to turn a healthy profit. Of course, you don’t start doing that on day one — which means you need to have money upfront too.
As your business grows and begins serving your customers efficiently and effectively, you’ll face additional challenges when it comes to accounting and bookkeeping.
What current trends in small business finance can you take advantage of to make things simpler in your business? Read on to find out!
The Link Between Personal Finance and Business
In the early stages of your business, your personal finances greatly impact how you fund your company. Your credit rating will affect the types of funding available to you. With poor credit, you’ll have a hard time getting a traditional loan.
Fortunately, one of the biggest trends in small business finance is alternative funding. There are a lot of ways to get money for your company that don’t involve conventional loans.
As a business owner, you also need to prepare for your own financial future, including business continuity. From preparing your personal taxes to keeping to a budget, taking the right steps in your individual arrangements can help your business succeed and keep your personal life on track too.
As we mentioned, one of the biggest trends in business finance right now is alternative funding. There are so many more ways to raise money than there have ever been, and some of them even help you research your market and make sure your marketing outreach methods are effective.
The biggest alternative is crowdfunding. Using Kickstarter or GoFundMe, business owners can appeal directly to their ideal audience to raise capital for their company. Having centralized hubs helps businesses avoid making endless pitches to audience after audience. There is a cost, of course — the platforms keep a percentage of the money you raise. But with the right marketing, you can do very well with crowdfunding.
Another way to get money for your startup is to watch for contests and competitions put together by larger brands. For example, Huggies ran a “Mompreneur” contest in 2012 that awarded $15,000 and valuable business advice. Pepsi has run contests for app developers, and Uber set up a competition for a chance to ride in an Uber and pitch a venture capitalist.
Universities can also be a source of startup funding. There may be seed funding or incubators attached to a school. Universities like Stanford and Columbia also contribute money to business accelerator programs that can help your company get off to a great start.
Using Technology in Accounting and Bookkeeping
Another big trend for small business finance is the use of technology and automation in bookkeeping.
Accounting has always been a detail-oriented and time-consuming process. Today’s tech allows businesses to automate even complex operations like audits, preparing tax returns, and doing payroll. With the right tools, companies can reduce errors and save money at the same time.
Another trend is using the cloud as the place to both do bookkeeping work and store information. With the cloud, the right people have immediate access to the information they need. You can also take advantage of cutting-edge computing power without having servers or expensive equipment on site.
Bookkeeping is essential to every company because it allows you to manage taxes, make management decisions, and determine how much financing you need. Today’s technology will enable you to use data analytics to understand critical costs and decide where you can save money.
Technology tools are a game-changer when it comes to how bookkeeping is done in modern companies. Make sure you’re taking advantage of them!
Outsourcing and Partnerships With Professionals
Finally, many small businesses are jumping on the outsourcing bandwagon. It can be much more useful to hire an external accountant than to have an in-house finance department. You can outsource payroll and benefits management as well.
Partnering with outside professionals gives your company a lot of benefits. For instance, an accountant can help you plan ahead as your business grows. They can offer advice, not just tax paperwork. Best of all, accountants stay on top of frequently changing finance laws and can help your company keep up.
When you outsource, you’re connecting with experts who specialize in a specific area. They know precisely how to maximize the efficiency of the operation. As a result, you get more expertise for less cost.
Take Advantage of Today’s Financial Trends
Now that you know the financial trends in today’s small business environment, it’s time to evaluate your own company. Are you aware of how your personal finances affect your business and are you planning accordingly?
Do you have the latest technology and accounting tools deployed? Are you outsourcing when it makes sense? If so, you can rest assured that your company is more efficient than it would be otherwise.