When you own your own business, you will start to hear about various things that are meant to be “king”. For instance, content has been “king” now for the past couple of years. At least, that’s what people are now saying seeing as content is such a big influencer and is one of the best ways of attracting as much traffic to a website as possible. There are also some entrepreneurs out there who would argue that it is in fact the customer who is king. After all, without plenty of customers, your company won’t be able to make enough sales to break even and go on to make the profits that your company needs to survive, look into things that you need to know for a scope of audit.
These are true, of course, that customer and content are both really important to a business’s success. But are they really king? I would argue that there is something much more important in the corporate world that controls a lot of what entrepreneurs and CEOs do. It’s so important that it even dictates various aspects of how a company is run. You’ve guessed it; I’m talking about money. Money is the true king of business and is, ultimately, what rules the roost.
Here are some of the many reasons why money is ruling your business and how it has a huge impact on everything that you do.
Can’t Get Started Without It
First of all, there is no way you will be able to go about setting up your own business without any money behind you. The majority of entrepreneurs and startup founders have some sizeable savings in their bank account that they can use to fund their new company. However, this isn’t always possible for some people. Thankfully, that doesn’t mean that you need to resign your corporate dreams to the dustbin, though. There are plenty of ways you can get the finance you need. You can see about finding an alternative finance provider if you don’t have such a good track record with credit. However, if you think that you will have an easy time getting some credit or financing, you can visit your nearest bank and talk to the bank manager about getting their Business Loan programs. If you are feeling really motivated and are completely committed to your business idea, you should consider setting up a Kickstarter campaign as a way to help raise your funds.
Your Budget Is King
When managing your money, it’s really important that you put a budget into place. This will help you get a good overview of your company’s finances and complete financial situation. Sure, your money might be king of your company but this budget is the overall ruler of your cash! Without it, there is no way you would be able to correctly allocate your funds or spend your money in such a way that wouldn’t bankrupt your company. However, if it’s too late and the time has come to file for bankruptcy, make sure to speak with a bankruptcy lawyer for expert legal advice and assistance on chapter 7 bankruptcy. A bankruptcy attorney can help you assess your situation and determine if filing for bankruptcy is your best bet. If you don’t have a head for finance, there’s nothing too much to worry about. Just hand your budget over to your financial department or accountant and they will take care of all your cash management for you.
Employees Want Your Cash
You will probably need to employ a team of workers to help you and your company achieve all of your goals and targets. This is especially important when your business is going through a period of growth and development as you will need as many hands on deck as possible to increase the size and productivity of your company. There’s just one problem with employees – they always want your cash! There’s no getting around the huge expense that employees will have on your company, but this is one that you will have to simply take on the chin, I’m afraid. When you do start hiring a team of staff, don’t forget that you will also need to budget for their sick and vacation pay as well as monthly payments into their pension plans.
Investments Prop Up Your Company
Once you do start making a profit, you need to think about what you will do with all your money. You could just leave it in the bank if you want, but that won’t see it grow as much as it could if you invested it. Bank accounts these days have very low interest rates attached to them. That means that your money in the account won’t get quite as much interest added onto it each month as you might like. So, it’s a good idea to look for some investments which will see your money grow a lot more. For instance, you could invest your cash in the stock market or in other business funds. However, it’s always important to remember that investments aren’t always as safe as bank accounts. Sure, there is a good chance that your money will grow and increase in value, but there is also the risk of losing some of your money if the investments lose value. Some investments are safer than others, and you might want to start off with the safer options if you are totally new to the investment markets.
Cashflow Makes Or Breaks Businesses
Once you start receiving payments from clients and paying your own invoices and bills to your suppliers, you will have to manage your cash flow. Cash flow is just all the money that is coming into and going out of a business. In order for your business to keep on top of all the bills that come your way, you need to have a good cash flow. So, you need to ensure that there is always cash in your bank account that you can always use to pay your bills. If not, then these bills and invoices might go unpaid for some time and you could end up incurring fees for late payment. These fees are just excess costs that your company could really do without. If you find that you are struggling to control your cash flow, it’s worth speaking to a corporate financial advisor for some useful tips and helpful pointers. In addition, you might also want to contact FinLync for a cash flow forecast software, which can help you predict the market.
Expenses Pin Down Your Profits
All businesses have expenses, there is just no getting away from them. But that is no bad thing. In fact, it’s important to have some expenses on your books so that you can bring down your overall annual profits of the company. This will then reduce the total taxable profit you make. That means that you can then lower your yearly tax bill. In some cases, entrepreneurs are able to drastically reduce the amount that they have to pay in tax each year. There is a whole host of different expenses that you can claim for your business and corporate tax. If you aren’t entirely sure what counts, you should speak to your accountant about it.
There’s Always Room To Negotiate
When it comes to finding new suppliers, you should always try and negotiate a better price for their products or services. Generally speaking, the price that they first offer you isn’t going to be written in stone. Most companies and organizations will be willing to discuss the price that you will end up paying. You should also remember this when you start hiring staff. New recruits might not be happy with the wage or salary that you first offer them, and they might want to negotiate with you. You should be open to these kinds of salary negotiations. Otherwise, you might end up putting off some great recruits from wanting to work at your company.
Never Forget About The Annual Tax Return
Your business will have to pay tax to the tax man each year. This is something that you really can’t forget about. Otherwise, you could end up receiving a very big fine through the post. In some cases, not paying taxes after a few years will result in jail time. So, make sure you always stay on top of your tax return. Thankfully, this is something that can be easily outsourced if you don’t think you can handle all of this on your own. An accountant will tell you all the paperwork and documents that they need in order to file your tax return. They will need to know your yearly expenses as well and will need evidence of all of these. They will then go and do their thing, and in a few weeks or so, they will have figured out how much your company needs to pay to the tax man. It’s also important to remember that you will need to pay your own personal tax on top of what you are paying for your company. Of course, the amount of company tax will have an effect on the final amount that you have to pay personally, as it will affect your personal income.
As you can see then, there are a lot of different ways money can take a hold of your business. But as long as you have a dedicated team of financial advisors by your side, you shouldn’t have too much to worry about.