The great thing about habits is they become second nature, and when good financial habits are second nature, you don’t have to think about the tasks that help keep your business running smoothly. Adopt these habits, and you’ll reap the benefits of a higher income and peace of mind.
Make tracking expenses a habit
It just takes 21 days to form a new habit, so if tracking your expenses has been hit or miss up to now, give yourself three weeks to make this important habit stick. And make sure you’re keeping your business expenses separate from your personal expenses. It can cost you in the deductions you can take if you don’t have clear and separate expenses. Use whatever method works best, whether it’s pen and paper, an app or software you enter each day, as long as it’s a method you’ll keep up with. If one doesn’t work out well for you, try another.
Keep investing in yourself
Since you are the main asset in your small business, make it a habit to invest in yourself, either through joining associations, attending conferences or enrolling in classes that will help you grow your business. You never know where the next big payoff will be, but putting yourself out there and staying up to date with information in your industry will ensure you’re ready when it comes.
Think like a CFO
No matter how small your business, it pays to stand back every month or quarter and analyze your business with the calculating eye of a chief financial officer. They think strategically about what’s working in a company and what’s costing too much. Maybe that client you finally landed has turned out to cost more in time and money than they’re worth. Maybe a small marketing investment is paying off much better than expected. CFOs analyze all expenses and income with the goal of reducing the former wherever they can and increasing the latter. Strategize like a CFO, and you’ll take your business to the next level.
Market in good times
It’s easy to let marketing slide when things are cooking along. Trouble is, most businesses have good times and down times, and if you’re not marketing in the good times, your down time can end up being pretty rough. As hard as it might be to take time out to market your business, it’s important to do it at all times, even if it’s just a quick ad placement or an email to keep in touch with a client. If you make it a habit to do some marketing each week, even when busy, you’ll have fewer slow times to worry about.
Understand your limits
Keeping track of accounts, tax payments and deductions are complex and time-consuming activities. Get into the habit of looking for ways to outsource any activity that cuts into your time or that you’re not confident about. If you don’t know how to do payroll, it makes more sense to outsource the work than to try and save money by doing it yourself with a payroll calculator. If you know bookkeeping is a challenge for you, an accountant can be cost effective by helping you avoid late fees and penalties. And they can advise you on tax issues and deductions you might not be aware of, saving you a bundle.
Busy entrepreneurs and small business owners can make life easier by getting into good habits with their finances. And if you’ve fallen into some bad habits, don’t worry; push yourself for 21 days to make some changes, and you and your business will reap the benefits.