Are you the small sole- proprietor who is new in the industry and is facing challenges munuvouring the financial management? Below are some ideas for managing finances in Kenya that may be of benefit to your business.
Financial management is the strategic planning, organizing, directing and controlling of financial undertakings in the organization or the institution. These ideas include;
Pay yourself
Running the mid- size business can tempt you to put everything in your daily operations since the extra capital can help the business grow in the long run. According to some research by Alexander Lowry, business owners should compensate themselves accordingly to ensure both the business and personal finance are in good shape. It is important to remember to pay yourself as much as you pay others. As much as it is important to get the business running and pay everyone else, remember if the business does not work out, you will not have ever paid yourself.
Monitor the spending
It is important to know the amount of money you spend in the day, week or month to avoid racking up bills you do not need. Failing to monitor can also lead to overspending in disuse of business funds. Make sure you know how much you have withdrawn or spend from the checking account, savings account or even the credit card account. Track your expenses by managing your accounting books or using the simple software to record your transactions.
Invest in growth
Keep the eye on the future and set some money aside to invest in opportunities that will lead the business to the healthy financial direction. It is important for the business to demonstrate that they are willing to invest in the future if they want to attract the best employees. Aside from the customers appreciating the increased level of service, the employees will also appreciate for investing in the business and their career as well. This wills ultimately cruet more value for the business.
Cut costs and increase revenue
Decreasing expenses and increasing income are two straight forward tips that are hard to accomplish. To cut costs you need to analyze your expenses by looking at current expenses ureu and amounts, scale back and eliminate frills and shopping around for new vendors. Also, being more efficient with time and removing destructions that are time wasting such as unnecessary meetings will help employees focus and make most of their working day, hence help in cutting cost. You can increase revenue by offering discounts, promoting products through online marketing and adding new product to sell.
Manage the inventory
Inventory management refers to the process of ordering, storing, using and selling the business’s inventory including raw materials, components and finished products. Avoid ordering too much inventory that end up staying in the storage and collect dust but also avoid running out of goods constantly forcing you to turn away customers. This can be done by tracking down how much inventory you have in the business before ordering more.
These few tips could be of benefit to your business if understood and followed to the latter but it is also important to consult the financial expert before making huge decisions that will cost your business later.
