Habits make a man. At least you have heard so all your childhood. The need for good habits is so vital that your entire personality depends on them. The same applies to business owners. Financial habits make or mar your business. Despite having the best resources, entrepreneurial abilities and strategy in hand, a number of business owners fail to adapt to the right financial management habits.
What do Business Owners consider as Growth?
Not many owners realize that adapting to the right financial practices and habits ensure steady growth. Growth in business does not mean mere profits and numbers. If you own a small business, you might want to measure growth by the categories of customers who keep coming back, the demand of your products or services, loyalty in the markets and the reputation you build over a span of time. This might not seem easy to achieve but adapting a few essential habits will help you get there—over time!
- Review your Finances
- While your business will have difficulties, you need to understand the “pattern” of your expenditure and earnings at the outset. Decide if you need a business loan, a loan against property for your business or a secured business loan; based on the review of finances
- Check up on seasonal changes in the pattern, if any.
- Make sure you understand where the maximum income generation is happening while also tracking the loss areas.
- Monthly reviews will be the right target to set. You have to understand how well your business is operating before sniffing out the weaker bits of operations.
- Maintain and Manage the Business Budget
- It is vital to have a budget. It gives you a goal and a limit. While limitations must not pull you down financially, setting a goal (with an upper limit) is actually motivating. This helps you to track the profit and expenses around the month. It also allows you to understand what aspects of your business needs improvement.
- Once you set the budget, indulge in end-of-month comparisons with the business results. Budgeting gives you the power to understand the problem areas of your business. It also helps you make informed decisions.
- Tackle Taxation, Liabilities and Debts
- Discipline your business dealings before it gets too late. It makes no point earning premium profits if your liabilities, debts and loan rations are not seeing a declining trend. Save ample money aside to pay taxes.
- It is important that these be paid on time. The penalties for missed payments influence your business badly. Engage in debt reduction. While short-term debt fuels business growth, you need to ensure you reduce it to the minimum.
- Unnecessary debt is not advised. Work on repaying business loans quickly. When picking a business loan, research the market to understand the best bet for your needs. Piramal Finance is a reputed name that offers a wide array of loans for businesses. Both big and small businesses can benefit from a variety of loan products.
The top business loan options available with Piramal Finance are-
- Secured Business Loan
- Business Sarthi
- Debt Consolidation Loan
- Working Capital Loan
- Do not Swipe Cash, get a Salary instead
- The majority of business owners make the mistake of swiping off money as per their requirements directly from the business cash box or account. This will ultimately contribute to a miscalculation in revenue consolidation and profit assessment.
- Keep a chunk of earnings set aside for your personal needs. Consider this as a “salary” of sorts you pay yourself! This way, the expenses stay in check while ensuring that your business has transparency too.
- Understand the Priorities for Business Structure
- As a business owner, you have to take responsibility to judge the needs of your business. Sometimes a business loan pumps more funds into the business. This makes operations faster and smoother.
- Sometimes, again, debts slow down business profits and you need to repay them quickly. These decisions need to come from situations your business sees.
- You cannot strategize ahead but can only observe and take action. You simply need to understand the priorities best suited to the structure of your business.
Adopt such financial habits for heightened growth in business and better business results. Just adopting these habits will not help. You need to focus on the same and stay true to them.