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Photo by Karolina Grabowska

As a business owner myself, I know how important it is to be smart with your finances. These small business financial planning tips will help you out, just like they have helped me and dozens of my clients.

You have lots of money running through your fingers. Even a “small” business can have revenue in the millions and six-figure profits. As such, making even small financial planning improvements can add up. Here are five things to think about with your small business finances.

Know Your Financial Resources

It’s essential to understand what you’re working with financially so you can make informed decisions. Your financial resources are like tools in your toolbox. Knowing what tools you have and how to use them will make a huge difference.

Stay on Top of Cash Flow

Managing cash flow is crucial for any business of any size. You’ll want to cover expenses with room to spare so you can invest in growth opportunities and be ready for the unexpected. Accounting software can help you stay organized, monitor your cash flows and provide other important business financial metrics.

Build Up Cash Reserves

Stuff happens! That means unexpected expenses will pop up. Having cash reserves can help you weather those storms. I may not be easy to do, but set aside a portion of your profits each month when times are good to build up your reserves and be ready for whatever might come your way.

Keep Personal and Business Finances Separate

Trust me, it’s much easier to keep track of things when you have separate bank accounts, credit cards, and records for your personal and business finances. Plus, it makes tax season a lot less stressful!

Don’t Forget About Taxes

And while we’re on the topic of taxes, Uncle Sam will want his share. As the business owner, taxes on business profits are just as important to manage as your personal income taxes.

Get Professional Help

Friends from school used to tell me that I was nuts wanting to own my own business(es). The professional help they suggested was more of the doctor of psychology type. But I will say that trying to run a business without professionals is like throwing (a lot) of good money away.

Work with an accountant to unlock all available deductions and credits while staying compliant with the latest tax laws. Equally important, get help from a Business Financial Planning professional. They can help you create a plan that aligns with your personal and business goals and help you stay on track with regular monitoring and adjustments.

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