Make the most out of your financial resources with these strategies.
Sustaining a business requires more than improving products or services and staying relevant to the market. It involves tried and tested money management techniques that can help entrepreneurs like you keep up with the expenses while earning profit.
Money management, though, has never been a walk in the park. Challenges that range from limited or inconsistent cash flow, debt, to tax compliance woes, among many others, could slow down the growth of your venture.
So it's best to revisit a few financial strategies and, along the way, discover what banking tools could help you stay on track of the business ball game:
Create a budget...and stick with it
A business budget provides a financial framework for setting revenue goals and expenses over a specific period.
By forecasting or anticipating your business's revenue and aligning your expenses, you can prioritize the most important ones, cut down on unnecessary costs, and find ways to increase your income.
It's equally important to come up with a realistic budget as well. Working within the parameters of your financial resources could prevent you from over or underspending. This way, you can meet the immediate as well as long-term needs of the business.
In addition, using expense tracking tools can help you regulate your finances. It keeps a daily record of your receipts, invoices, and other outgoing expenses without the hassle of doing so manually.
Regularly build your savings
After becoming more familiar with your business' expenses and determining the areas you could cut costs (like energy and a few business supplies, for instance), you could save the business money.
Most experts recommend keeping cash reserves equal to three to six months' worth of expenses. This way, your business is provided an extra cushion for unexpected costs like sudden tax payments or other emergencies.
It's best to steadily grow some excess funds through a savings account in the bank since it protects your funds. Over time, you could use a portion of it for investments, as well, to generate more income for your short and long-term financial goals.
Moreover, a savings account in the bank will help improve your credit score and build your credibility among lenders and banks alike.
Consider financing options
In line with having a good credit score, you can increase your chances of availing the right type of funding for your business. This way, you can obtain more capital or boost your cash flow.
Let's say you're a small business owner who needs to make a big purchase right away. Opting for a personal loan could be the quicker route with its easy application process and flexible terms - giving you options to choose the repayment schedule that works best for you.
Citi Personal Loans can help micro, small, and medium-sized businesses jumpstart their financial goals through its fast and easy loan approval process with no collateral required. Citi offers flexible repayment terms of 1 to 5 years with a high loan amount of up to P2,000,000.
To learn more, log on to https://www.citibank.com.ph/.