The Small Business Owner’s Guide: How to Manage The Finances of Your Small Business

| August 30, 2023 | By

Managing the finances of a small business, especially a solo one, can be completely overwhelming. There’s a lot to juggle, from cash flow management to unexpected startup costs.

If you seem like you’re constantly treading water, you’re not alone. We’re here to help. Here are the small business finance strategies you need to succeed:

Strategies for Managing and Tracking Small Business Cash Flow

Your cash flow is the lifeblood of your small business. This might seem like a dramatic assessment, but it’s not. Understanding both cash inflows and outflows is crucial for maintaining smooth business operations.

Three strategies that can help you stay on top of your cash flow include:

  • Opening a business bank account: Your business banking account will play a pivotal role in tracking and managing cash flow. This type of account allows businesses to deposit and withdraw money and facilitates building a financial history and tracking transactions.

  • Embracing mobile banking solutions: Business mobile banking will help you manage finances on the go. When traveling or away from your office, you can check transactions, deposit checks, transfer money, and even receive push notifications for specific banking events.

  • Meeting with a financial expert, like a business banker, can help you glean invaluable insights and objectivity in overseeing credit, bills, deposits, and more.

Strategies for Successful Small Business Accounting

Understanding some basic accounting principles will help you run your business better.

This doesn’t have to be complex. Accounting does involve thinking about several different types of financial concepts, however, including:

  • Income

  • Expenses

  • Assets

  • Liabilities

Navigating the intricacies of your various financial situations may be challenging, depending on the nature of what you do. An accountant can help you organize your finances. Speaking with a business banker can also help you understand your financial strategies, giving you the information you need to make great decisions for your business.

Strategies for Small Business Financial Planning and Forecasting

If you’re a small business owner, there’s a decent chance that you like planning ahead.

That’s a good thing. Planning and forecasting your finances will help you make strategic decisions for your business. At its most simple, financial forecasting and planning will help you anticipate future financial needs and help you understand big-picture goals to invest your money in when you enjoy a profitable season.

Strategies that can help with effective financial forecasting for your business include:

  • Setting clear financial goals for your business.

  • Pinpointing your specific income sources and expenses.

  • Reading your financial statements.

  • Reviewing your progress toward your financial goals over time.

Strategies for Managing Small Business Debt

Sometimes, going a little into debt can be necessary for growth. It can be okay to be in debt as a business owner.

You do need to manage your debt effectively, though. Failing to do so can pose frustrating (and usually avoidable) challenges.

Whenever possible, prioritize the following debt management strategies: 

  • Make payments on time to avoid excessive interest.

  • Consider debt consolidation, if applicable.

  • Talk to your business banking team to learn more about any available solutions to ensure your debt is truly helping (and not hindering) your business.

Strategies for Understanding Your Small Business Finance Options

If you want options to help you manage your finances better, you have them. Here is just a sampling of the various solutions, teams, and tools you have at your disposal:

  1. SBA loans: These small business-specific loans can help you access game-changing funds to grow your business. Choosing the right one and getting prepared adequately is crucial, but it may be a more accessible option than you think.

  2. Local business loans: Usually funded by community banks, these tend to come with flexible terms and personal support, which can make them a good option for small business owners seeking wisdom and expertise as they get their operations off the ground.

  3. Your community bank itself: When you need to understand your options or talk about your finances with people who have experience and specific knowledge about your local circumstances, the team at your community bank can give you the time and attention you need

Ready to Feel Confident About Your Small Business Financial Strategies?

Navigating the financial landscape of small businesses can be difficult, but with the right strategies and understanding of available options, success is within reach.

If you’re ready to embark on a successful financial journey for your business and are seeking your next step, we’ve got a guide that could help. Check out what the roadmap to an SBA loan looks like right here—and feel free to contact our team at any time if you have any questions.

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