First Midwest BankFirst Midwest Bank logoArrow DownIcon of an arrow pointing downwardsArrow LeftIcon of an arrow pointing to the leftArrow RightIcon of an arrow pointing to the rightArrow UpIcon of an arrow pointing upwardsBank IconIcon of a bank buildingCheck IconIcon of a bank checkCheckmark IconIcon of a checkmarkCredit-Card IconIcon of a credit-cardFunds IconIcon of hands holding a bag of moneyAlert IconIcon of an exclaimation markIdea IconIcon of a bright light bulbKey IconIcon of a keyLock IconIcon of a padlockMail IconIcon of an envelopeMobile Banking IconIcon of a mobile phone with a dollar sign in a speech bubbleMoney in Home IconIcon of a dollar sign inside of a housePhone IconIcon of a phone handsetPlanning IconIcon of a compassReload IconIcon of two arrows pointing head to tail in a circleSearch IconIcon of a magnifying glassFacebook IconIcon of the Facebook logoLinkedIn IconIcon of the LinkedIn LogoXX Symbol, typically used to close a menu
FDIC-Insured - Backed by the full faith and credit of the U.S. Government
Online business owner at work
Get Insights

Get monthly ideas delivered right to your inbox.

Subscribe for Insights

For Your Small Business October 13, 2020

Tips for spending money wisely as a business owner

It’s fun to be in charge, but it also means you’re responsible for making the tough decisions. There’s no doubt that  managing your business’s finances is essential to the success of your business. You can’t be afraid to dive deep into your business money matters, and you have to take control. Here are some tips for spending money wisely as a business owner.

It’s worth making time to step back and understand where your money’s going before it’s too late. You should know about every dime you spend and be willing to speak up when you see lavish spending or inappropriate purchases.

Use these tips to help you make sure you’re spending your money wisely.

As a business owner, there are often so many needs that you have to spend money on. From your startup costs to investing in your business and maintaining day-to-day operations, it’s important to properly manage your money. Cash flow is as essential as your product or services. If you can’t manage your money — how well you run the other parts of your business won’t matter.

Have an Emergency Fund

You never know what’s going to pop up when you’re managing a business. How many people thought that the COVID-19 issues would pop up? Not too many people have been able to say they expected this to happen.

Businesses who have an emergency fund at this time will survive better than those who do not. If you don’t have an emergency fund right now — there is no time like the present to begin saving one.

Save up some extra money. The habit of saving money is one that is as important in your business as it is in your personal life. Save right from the start. It’s not smart to live on the edge and expect that all will go smoothly from here on out.

Make a list of reasons why you might dig into your stash and spend it. Then, don’t allow your emotions or moods to dictate how you use your emergency fund. If you’re not responsible, you’ll be sorry when it’s missing later on and you need it. Those who had money saved will be able to weather the many storms of life and business.

Ask if the Purchase is Necessary

Even when you have a sufficient stash of cash — always ask yourself if your purchase is necessary. For example, if your hard drive crashes and you need to recover your data, then call a company like a secure data recovery service who specializes in this line of work and can help.

You won’t feel guilty spending money on purchases and situations that are essential to the functioning of your business. Use your money where you need it most, and it won’t ever feel like you’re hard up for cash. Curtailing frivolous spending will help keep you in line.

Invest in Good Employees

It’s always wise to invest in good employees. If someone walks through your door who’s a perfect fit and has the skills you’re looking for, then it’s probably a good idea to dish out the money for their higher salary. However, it doesn’t matter how much or how little a team member costs for their salary if you don’t have it. If you don’t have the money — don’t hire at this time. Yes, that is extra work for you, but in the end, you’ll be able to hire as soon as you have the money.

It’ll cost you more to train and lose staff then it will to invest in and hire the right ones from the start. You won’t regret your decision when business is flowing and you’re hitting your numbers.

Work from A Budget

One way to make sure you’re spending your money wisely is to create a budget. It’s never a good idea to work from the top of your head and try to keep tally of expenses on scratch paper. Make sure you and everyone in your office are following strict budgets where all the finances are laid out. Everyone needs to know the approximate spend for small businesses. If your team has a ballpark idea of where your startup stands — it will minimize surprises and keep your business in a healthy financial state.

Be clear and detailed to reduce the chance of any confusion. Let your employees know that you, as the owner, are not a spend-thrift and that you value their care of financial items for the business.

Conclusion

As the owner of the company, it’s up to you to confirm the money’s being distributed appropriately. You want to avoid any unfortunate situations or financial troubles. Take these tips into consideration as you’re figuring out where it’s wise to spend the money at your company.

 

This article was written by Choncé Maddox from Business2Community and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Subscribe for Insights

Subscribe