Small businesses are essential to the U.S. economy. In fact, nearly half of U.S. private sector workers are employed by small businesses.
Unfortunately, nearly half of new businesses also fail within the first five years. Staying on top of your financial situation can help you overcome challenges and help your small business succeed. Here are his top 5 financial skills you need and how Quicken Classic Business & Personal can help you.
1. Stick to your budget
Central to business success is the ability to create a budget. Knowing how much money you make and how much you spend each month is absolutely essential to the health of your business.
Creating a monthly budget will help you know if you are making a profit, and if so, by how much. It also helps you track your clients’ spending habits on a monthly and yearly basis.
Finally, proper budgeting is essential to making sound business decisions. For example, many businesses must overcome slow periods at certain times of the year. Tracking your finances will tell you what you can and cannot spend, and when you might need a business loan to get through a cash crunch.
That’s why many small business owners invest in budgeting software to get a clear and up-to-date view of their financial situation. Quicken Classic Business & Personal automatically imports your earnings and transactions to give you a complete picture of your financial health.
2. Set realistic goals
Successful small business owners set SMART goals: specific, measurable, achievable, results-based, and time-bound.
- specific — Be specific about what you want to accomplish.
- measurable — Make sure you have a way to measure your progress.
- achievable — Keep your goals realistic and celebrate each success.
- results based — Connect goals to business goals, such as achieving a specific revenue in a specific quarter.
- Limited time — Set a time limit for your goals to help you stay focused.
Quicken Classic Business & Personal helps you create, track, and achieve SMART business goals.
Understanding where you are today will help you set specific, achievable goals for tomorrow. This software allows you to keep your finances up to date, measure results anytime and anywhere, and view results over any time period.
3. Separate business and personal finances
If you are a startup or a sole proprietor, it is very easy to run your business from your personal bank account. This can cause confusion when measuring your business’s income and expenses, and can also cause problems at tax time.
To keep your finances clear and simple, run your small business from a separate bank account and keep other financial accounts like PayPal and Venmo separate. (Keeping your bank account and business email address separate makes this easier.)
Quicken Classic Business & Personal tracks your business and personal budgets separately, so you can keep your business and personal finances separate and work in one app.
4. Keep proper documentation and receipts
Recordkeeping may not be the most fun part of running a small business, but it’s definitely essential. Keep track of all your transactions so you know how much you’re actually making. Plus, you’ll have all the documents you need come tax time.
But that doesn’t mean you need to keep a huge stack of receipts. Instead, use the Quicken app’s Snap and Store feature to save a photo of your business receipts for each transaction.
Quicken Classic Business & Personal also makes it easy to track your home expenses separately, so you can also use budgeting software to track your home office deductions.
5. Understand survival indicators
Every business has ups and downs. This is a natural part of running a small business. The key to surviving the “downturn” is knowing your survival indicators.
for example:
- How much minimum income do I need each month to cover my monthly expenses?
- If your revenue falls below that minimum for several months, how long can you survive that shortfall?
- If you anticipate difficulties in the future, what expenses can you cut today?
- If you need to offer early payment discounts or put your products on sale, how much revenue can you make right away?
Quicken Classic Business & Personal makes it easy to see these types of numbers and more, so you always know what you need to do to keep your business running.