Keeping accurate and regular financial records will allow you to gauge your business finances at any time and monitor your success or failure.
This information gathered in these records can tell you the trends in your business cycle and let you evaluate the consequences of your financial decisions. Record keeping is essential and the law requires certain records for taxation purposes to be kept for five years. However the financial records of your business are important for your own business growth. Consider using a professional bookkeeper if you don’t think you fully understand the process. It can save you money and stress in the long run.
Profit and Loss statements, balance sheets and a cash flow forecast can help run your business successfully. These financial statements all combine so you can manage, analyse and forecast with conclusive facts. They will also help if you choose to sell your business at a later stage.
Effective financial management is the key to a successful business. The bottom line is not the ‘be all and end all’. A profitable business can still fail due to poor cash flow management. Your cash flow management strategies, costing and pricing, and credit management are crucial for the financial health of your business.
There are a few ways to obtain the finance needed when starting a business.
- Bank loans
- Private loans through friends or family
- Grants and crowdfunding
- Personal savings
- Creditor funding
However, all sources will need a business plan to be presented before funding consideration is given. Banks particularly will require a well organised and thorough business plan.
Your can find a business plan template here
Funders also like you to take part responsibility when applying. For instance they would like you to show how much you are putting towards the venture. Whether this be cash or equity. This will give you a greater chance of success. The security will also be an important factor in getting the finance you need. What are you risking?
Working for Yourself