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The 2 Most Important Finance Tips for Small Business Owners


Taking the step from working for someone else to doing it for yourself can be a daunting one or it can be not daunting enough. It all depends on what kind of character you are, and it’s important to find out so you can monitor yourself, because it is easier to see what someone else is doing wrong (and right) than to assess yourself.

Whatever area of business you’re going into, you obviously think you can make money at it, but it’s unlikely to happen overnight, and you need to stay afloat until it does.

When people start a new business, most are under-capitalized, which means they don’t have a financial buffer to see them through the early months. If you are naturally cautious, you run the risk of undercooking your entry into the business world. Caution has many merits but think of it like this: you’re driving on a freeway, and you must be at your destination soon, but you’re stuck behind a truck that keeps speeding up and slowing down, then accelerating again, so you can’t get past. Are you going to sit there all day, rehearsing a speech about why you’re late, or are you going to do something about it?

Act When It’s Needed

Check the mirrors: nobody hurtling up in the outside lane, so put your indicator on, swing out and put your foot down. You need to have the courage of your convictions. Your car is fast enough, the road conditions are safe enough and you just need a blast of speed, then suddenly the truck is in your rear-view mirror. It feels good. You need to apply this to your business approach. Don’t be shy: soft openings are overrated. You need to make your presence felt, get out there and start earning money.

Being the cautious type, you probably haven’t gone big on premises, signage and all the bells and whistles established businesses have. This is good. You need adequate space in the right place, but maintaining financial health and making money is the first step; the rest can come later. On the other hand, the sooner you start to grow, the better, and that might mean borrowing money. You don’t really want to, but sometimes it’s the only way. Now let’s look at the opposite extreme.

If you’re all about action and damn the consequences, maybe people see you as a gung-ho type‌, you’ll have been past that truck like a bat out of hell and about to be pulled over for speeding. Not a good idea, and not necessary. Applying this to your business character, maybe you see yourself in a big office with room to grow. That can be a good idea in certain circumstances, but when you’re just starting out, not so much. You’ll be paying too much rent; you’ll have spent more than you need to on furniture and equipment and you’re trying to run before you can walk.

Sort Out Your Personal Finances

If you’ve been caning the plastic and you’re just about maxed out, it’s time to restructure your personal finances so you can get your business finances in order too. But remember, it’s essential to keep business separate from personal. That means separate bank accounts, separate credit cards and separate loans. If you are in debt, it might be a good idea to take out a personal loan to pay off a credit card. Credit cards are like recurring loans anyway, but at relatively high interest rates, so shop around and see where you can get a better deal. This is a great way to consolidate your debt and simplify your monthly repayments.

If you’re doing this in person rather than online, don’t go meekly into the manager’s office like a failure waiting to happen, but don’t storm in there being overconfident as that’s not the right approach. Rounded personalities make business successes. A combination of drive and optimism with a level head. That is certainly what lenders want to see. So, there you go: analyze yourself and give yourself the benefit of your own wisdom. Keep it real but keep it positive. Aim high but don’t fall off the ladder on the way up.

Published: June 9, 2023

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justin weinger

Justin Weinger

Justin Weinger is a 15-year corporate finance veteran, with a shared passion for blogging and content creation. He has spent 15 years in various industries, including automotive manufacturing, automotive financing, banking, consulting, and healthcare. When he isn't working, or blogging, he is a married man of 8 years, and a proud father of 3 girls.

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