From mobile food trucks to quaint little bookstores and cafes, who hasn't dreamed about owning a business, running a company that creates jobs for others, and also delivers quality products and services to customers? Dreams and goals can be realised. Banks offer business loans to startups as well as established businesses to help them grow and expand. These loans are customised to suit the unique and varying requirements of different types of businesses. When applying for a business loan, look for a bank that offers competitive interest rates, easy documentation, instant loan disbursal, and complete transparency in loan processing.
Be it a short-term personal loan or a long-term business loan, applying for a loan has become easy these days, especially when itâ€™s done online. Entrepreneurs and business owners can check loan eligibility online through the bank website or a reliable third-party website bankbazaar before applying. Once you have passed the first hurdle of obtaining funds to start your business, the next step is to keep track of your financial affairs such as working capital, revenue, and debts. To help you effectively manage your business finances, here are some useful tips:
- Hire an accountant or a bookkeeper to manage the income and expense accounts of your business.
- Review the reports regularly to keep track of all your minor and major business expenses.
- Develop financial projections while keeping the future of your business in mind. This way, you can be prepared for any unforeseen financial need.
- Keep up to date on invoicing such as sending out invoices once a product or service has been provided, set payment terms and conditions, track the sent invoices, and cross-check the invoice numbers with payments.
- Maintain a separate bank account for your business and personal finances. Mixing business and personal finances can create complications and also negatively affect your money management system.
- Small businesses can be funded using a personal loan or a loan against life insurance. If that's the case, then monitor your debt payments carefully so as not to default on your loan.
- Purchase insurance protection for your loans so that your loan repayment will be taken care of by the insurance company in the unfortunate event of your demise.
- Be frugal with your business expenditure. Focus on proper the maintenance of your office/business equipment so as to avoid excessive repair and replacement costs.
- Reduce travel costs for business trips. Choose decent but inexpensive accommodation for your business stay. Opt for economic-class flight tickets with travel insurance for your trip.
- If it's a small business, retaining a legal adviser on payroll can be expensive. Instead opt for temporary legal services as and when required for a reasonable fee.
- Don't break your long-term savings scheme like Fixed Deposit to fund the expansion of your business. Instead, opt for a low-interest rate personal loan with a short tenure and flexible repayment options.
- If you have a sudden inflow of cash, assess your financial needs and decide whether it can be used to repay your debts or invested back into the business.
- Use social media, email, and SMS to market your products and services. These are cost-effective marketing tools for small businesses.
- Be environment conscious and keep documentation to a minimum. Go paperless and adopt technologies that can help you with efficient documentation.
- Plan your initial business expenses carefully in terms of equipment, office space, and transportation. Cut down on expenses wherever possible as it is easy to run out of funds quickly in the startup stage.
- Get a separate credit card for your business expenses. Banks offer business credit cards that are more suited to expenses incurred by a company than personal credit cards. The credit limit on a business credit card can be higher than a personal credit card depending on the company's creditworthiness.
- All entrepreneurs or individuals with an idea or a dream to start a business canâ€™t expected to be proficient in financial management. Therefore, outside help is needed in such cases. Whether it is bookkeeping, legal practice or marketing, hire experts for a reasonable fee to ensure your business stays credible.
Big or small, all businesses need proper money management to monitor their cash inflow and outflow. Businesses can't succeed on just ideas. Financial management is important not only to beat the competition but also navigate the current economy. Establish a proper financial system that ensures your business generates profit.
This article has been produced by TNM Marquee in association with BankBazaar.