Wooh! If you’re reading this, that “wooh!” is all yours, because it means you’re starting a business and you’re doing it the smart way.
Getting the wheels turning on a small business is hard, that’s just the way it is. But hard doesn’t always mean it needs to be laboriously difficult to stay afloat. It just means you need to take the time and effort to look at the most important part of your business: the money.
Too many people dive into a new business venture without the financial literacy to make it through the very end. Heck, some of them don’t even get past the starting block. At iKhokha, our greatest joy comes from seeing small business owners thrive. That’s why we’ve compiled the 8 money management tips we believe will let you follow your dreams, minus the late nights worrying about how much those dreams are going to cost.
Our Top Money Management Tips
1. Stick To Your Budget
We know, we sound like your mom. But she was right, wasn’t she?
Whether your business is brand spanking new or you’ve already built up a solid customer base, it’s never too late to sit down and figure out how much you can actually afford to spend each month.
A solid budget is a blueprint for every budding business. It gives you insight into what you can and cannot do. At any time you feel uncertain about what the rest of the month looks like, you can refer back to your budget to gain some perspective. When you draw up a budget, it forces you to find what is absolutely necessary for your business and cancels out any impulsive purchases.
2. Face Your Finances
Managing your money from memory is going to lead to costly mistakes. Running a business takes enough brain power as it is but can you really trust that you’ll remember every piece of admin based on recall? We know we can’t.
Facing your finances head-on means digging into your records, pulling out all your important documents, and creating detailed spreadsheets for every aspect of your business. It takes time but, at the end of it all, you’re left with clarity and an empowering sense of control.
Read this next: How Can I Get a Small Business Loan in 2021?
3. Cancel Unnecessary Costs
When you’re just starting out on your small business journey, you may feel like you need a barrage of tools to help you get going. Whilst these tools and software are super helpful, you may not be using them as often (if at all) as you thought you would.
Maybe you have ten domains, a professional design account, or an online efficiency platform that you pay for on a monthly basis. If you aren’t using these things, ax them. They’re cutting into precious resources that could be used for more substantial investments. We recommend looking through your subscriptions at least twice a year and unsubscribing from anything you don’t use on a regular basis.
Whilst we’re on the topic of awesome apps that boost your business, check this out: The 5 Best Apps to Manage Your Money (And a Sneaky Number 6)
4. Keep On Top Of Your Transactions
Where is money coming in? How much is coming in? What are people buying from you? Keeping on top of every transaction (going in and going out) is paramount to evaluating the financial state of your business.
Taking care of each and every transaction means looking at both your income and your expenses. Trust us when we say that this makes tax-paying time significantly less stressful, and helps you to make informed decisions regarding the money circulating within your business.
And before you put your head in your hands at the thought of storing every transaction in a flimsy folder in the back room, there’s another way. With the right card machine and POS system, you can access every single transaction that has gone through your business digitally. They never get lost, never get ruined and they never get forgotten.
For instance, our iKhokha merchants never have to worry about losing sight of their previous transactions. The iKhokha app tracks every sale and compiles it into a comprehensive report, which you can access at any time.
To find out more about streamlined POS, pop on over to this blog: Does My Business Need a Cash Register?
5. Proceed With Caution
How great would it be if we could just throw caution to the wind and make spontaneous decisions on a whim? Not that great.
At the very start of a new business, you can’t guarantee it’s going to take off. Even after all your market research and proof of product, you never really know until you know. And you only know that when you’re breaking even, making profits, and seeing a constant increase in customer support.
One of the biggest mistakes you can make with your money when you’re running a business is to spread your money everywhere, without valid reasons for doing so. A successful business starts with neat, succinct spending.
You’ll get there eventually, but it takes some self-control first.
6. Maintain Your Cash Flow
Having a positive cash flow means you have more money coming into your business than money going out. This is where you always want to be, and you need to work hard to stay there. A positive cash flow brings in better loans with lower interest and will likely soothe the minds of interested investors.
Even if you start off with a large sum of cash from savings or a loan, money always runs out (very sad, we know). You need to focus on having enough cash flow coming in, on top of setting aside emergency funds for those rainy days.
7. Be Smart About Taxes
We’re all thinking it: bureaucracy sucks. However, it’s there for a reason and in order to have a functioning business, you have to abide by the rules of the taxman.
Tax applies to everybody, businesses great and small. Tax will be different for every business depending on the type of business you run as well as the revenue you’re bringing in every year.
This is why it’s important you register your business under the correct legislation, as this will directly affect how much tax you pay. If you do the things we mentioned above like facing your finances and keeping track of your finances, tax season is going to be waaaay easier than if you’re disorganised.
Our advice would be to include a bookkeeper and finance professional in your budget - especially if you don’t consider yourself to be particularly financially literate. They can help you out on where you can get rebates (yes!) and where you could be saving money.
8. Bring In A Side Hustle
This one may be a bit biased on our part, but we wouldn’t be doing you any justice if we didn’t mention the way that small businesses are growing their income by up to 35%.
If you already use the iKhokha Mover Pro for your transactions, you could bring a new side hustle into your business for mahala. If you don’t, it’s only going to cost you R199 to bring easy transactions and an exciting new offering into your business.
If that’s piqued your interest, you can read all about it here: Your Go-to Guide for Making iKash with iKhokha
Make Your Money Work For You
Our last and final tip: treat your ears to Work Hard by Frankie Paul. If there’s one song that’s going to inspire you to go out and make that money, it’s this one.
Yes, you’ve got some hard work ahead for you. At the same time, these money management tips make your money work for you.
Are you ready to take your financial health to the next level? What do you do to manage your money? Let us know on our socials, we'd love to hear from you!