One all-important task of new owners of small businesses is making enough money to keep their business afloat. Unfortunately, many new small business owners struggle financially. Studies show that more than 20% of small businesses fail within the first year due to financial struggles.
Even newbie business owners know how important it is to create and stick to a budget, track their spending, reduce business costs, and find ways to save money. But even with these efforts, many small businesses still fail because their financial situation is not as stable as it could be.
There are, however, things that new small business owners can do to hack their finances and improve their chances for success.
Here are three financial hacks for new small business owners:
Develop Strong Relationships With Suppliers
Establishing and maintaining strong relationships with suppliers is crucial for any business. After all, suppliers are an essential part of the supply chain and can significantly impact a company’s bottom line.
For one, good supplier relationships can lead to better prices. When companies have a good relationship with their suppliers, they are more likely to receive discounts and favorable terms. This also puts the company in a better position to negotiate prices when necessary.
In addition, strong supplier relationships can lead to better quality products and services. When suppliers know your company is committed to them, they are more likely to go above and beyond to ensure you are happy with their products or services.
Finally, good supplier relationships can help a company manage its inventory more effectively. When suppliers are responsive and easy to work with, it’s easier for a company to keep track of its inventory and avoid stock-outs. This shows just how important it is for small businesses to develop strong relationships with their suppliers.
Let’s say you recently bought a 2 post lift automotive system from a new supplier. You chose this particular supplier for their good reviews, complete system, and reasonable price. Building a good relationship with them ensures you get the best quality products and services on your next purchase.
One way to build a good relationship with your supplier is to communicate frequently. This way, you can let them know what your business needs, and they can provide you with the products or services that you need. You should also make sure to pay your invoices on time to show that you are reliable and value their products or services.
Finally, it’s essential to show your appreciation for their business. You can write them thank-you notes, send them holiday cards, or even give them small gifts. By showing your appreciation, you will let them know that you value their partnership and are committed to working together.
Reinvest Into Your Business
Another critical financial tip worth considering is to save money to reinvest into your business. You are giving yourself a raise for doing so. You can use the extra money to improve your products or services, hire new employees, or expand your business.
Reinvesting into your business is a great way to show your employees that you are committed to the company’s success. It can also help you attract new customers and grow your business.
One example is by setting aside a percentage of your monthly profits. This will allow you to build up a cash reserve that you can use when you need it. For instance, you can set aside 5% of your monthly profit and use the money to pay for unexpected expenses or invest in new equipment.
You can also reinvest back into your business by investing in employee growth. When you invest in your employees, you are committing to their development and to your company’s success. You can provide training opportunities, pay for professional development courses, or offer bonuses for meeting goals.
Invest in Yourself
One of the best things you can do for your business is to invest in yourself. This goes beyond paying a salary, giving yourself time to relax, and taking care of your health. It also means investing in your education and professional development.
When you invest in yourself, you commit to your business. This shows you are willing to put in the time and effort to learn new things and grow as a business owner. This type of commitment can be extremely motivating for employees and even help you attract new talent.
Also, when you invest in yourself, you are increasing your chances of success. By expanding your knowledge and skills, you are better equipped to handle the challenges of running a business. You will also be able to make better decisions for your business, which can lead to increased profits.
One good way for self-investment is by taking courses related to business financial management and accounting. By understanding the basics of financial statements and bookkeeping, you will be able to make better decisions for your business. You will also be able to track your progress and see where your business is heading.
Small business owners can save money and improve their financial situation by developing strong relationships with suppliers, investing in themselves, and reinvesting into their businesses. These three financial hacks can help you make the most of your resources and improve your bottom line.