All too often, small businesses and sole traders are only interested in financial advice that promises the help them make more money at a faster rate. While these articles are certainly helpful and can be inspirational for entrepreneurs, they also miss a huge part of your financial health: keeping you protected from strong headwinds, business mishaps, and other misfortune that can befall you and your firm. This short article is all about how you can use financial advice in order not only to build your business, but to ensure that all you’ve built is adequately protected along the way.
All small businesses must be cognizant of their cashflow in order to avoid liquidity issues in pinch periods. The solution that many small businesses opt for is to keep a separate pot of cash static in a different business account, which they can access if they need a short-term boost.
However, there are other techniques to help cashflow work: you can ensure you’re using the latest fintech products to help you access emergency small business funds, or you can use accounting software to give you an early warning that you might soon experience cashflow issues. These technologies are perfect for businesses that are looking for modern, time-saving solutions to help them get out there and expand their business.
No small business can afford to operate without insurance. That’s because you simply cannot predict what might happen to your small business. You might have a worker fall off a ladder while they’re stacking shelves or a customer slip on a shiny floor. You could see your firm fined for regulatory issues or for using the wrong tax code. All of these issues can be costly to your bottom line and your reputation.
In order to ensure that you can weather a wide variety of financial storms, you need adequate insurance that’s been designed to help small businesses just like yours. You should ensure you have a comprehensive workers comp insurance package to protect every employee from harm and loss, and similar packages to protect you and your business from the worst possible future scenarios.
If your small business is ambitious and forward-thinking, you may well have hired a financial advisor or, at the very least, a professional accountant. These individuals are wonderful at looking into the future of your business and your market in order to ascertain where the threats and the opportunities might exist for your industry.
They’re also able to point out when you might need to look to financial support, such as in the moments after the pandemic was declared in early 2020. Having a smart financial guru on your team can help you make contingency plans for the worst-case scenarios at the same time as hoping for the best-case scenarios. This means that you’ll have it both ways, protecting your firm from the worst while looking forward to seizing the best of the opportunities that come your way.
Use these three tips to better protect your small business finances in 2022 and beyond.