Detox your small business’ finances

By Ivan Serrano

Taking care of your small business is quite a lot like taking care of your body. Keeping your company financially fit requires you to be attentive to the resources you consume, the energy you expend, and the rewards those expenditures can bring you. Once in a while, you also have to detox: cut out unhealthy habits so you’ll be able to pursue your goals more effectively in the future. However, many small business owners have a tendency to lose sight of how basic the principles of putting their company through a financial detox really are. For some reason, our natural instinct is to think the formula for success is complicated. The truth is that it’s not—it’s just a matter of setting clear guidelines and sticking to them.

If you’re not sure where to start, here’s our step-by-step introductory guide to detoxing your business finances and whipping your brand into better shape.

6 steps to financial fitness

[amazon_link asins=’0998051802′ template=’ProductAd’ store=’succeeding0d-20′ marketplace=’US’ link_id=’925943cf-7535-11e8-aac8-9ff85fa6fb06′]Step one: audit yourself

Before you can start down the road to financial fitness, you need to have a clear picture of where you currently stand. For that reason, you’ll need to go over your budget with a fine tooth comb and look for places where you can cut back. A few of the most common include:

– Office space: do you really need all the room you’re using? Conversely, is there anything productive you could do with space you aren’t using?

– Insurance policies: if you’re paying several different kinds of insurance separately, consider consolidating your policies to streamline payments.

– Production costs: if you’ve been using the same technology to make your products for a while, consider a one-time investment in new equipment that could provide significant long-term savings.

– Marketing strategies: paid marketing on social media is an excellent way to reach a broad audience, but learning how to create more effective organic posts can be useful too—especially for businesses that are just starting up and trying to create a dedicated following of customers.

Step two: set specific goals
Knowing what not to cut is just as important. Think about what you want to accomplish this year. What can you absolutely not do without if you want to achieve those goals? Knowing the answer to that question will keep you from sacrificing anything critical to your success as you tighten your belt in other areas.

[amazon_link asins=’1500138053′ template=’ProductAd’ store=’succeeding0d-20′ marketplace=’US’ link_id=’ad2883bc-7535-11e8-a22f-01635c4b5dd8′]Step three: collect unpaid debts

You might be tracking what you spend very carefully—but how closely are you watching what you make? Trusting your clients to pay you on time opens you up to quite a bit of risk, so go over the work you’ve done and make sure you’ve been paid in full. If not, start reminding the clients who still owe you money that you need to be paid. Begin politely, and follow up every two weeks or so. If they’re holding out on you, be more… straightforward. Collections agencies exist for a reason.

Step four: renegotiate contracts

Businesses that have already been around for a couple of years or so can improve their financial situations by renegotiating old contracts for more favourable deals. Remember: your suppliers have probably come to rely on your business as much as you’ve come to rely on their work.

Step five: add liquidity

Sometimes liquid cash flow is the biggest hurdle a small or new business faces. Remember earlier, when we said you might be able to cut costs by investing in new equipment? That’s hard to do when you don’t have any money to spend, so think about taking out a business line of credit to help you achieve your short-term goals. Ideally, you should have a plan to pay off the debt with the money you save as a result.

Step six: start now

Don’t be intimidated by the thought of putting all of these strategies into place at once. You might only be able to do a few of them right away—that’s fine. Just make sure you do what you can, as soon as you can. It’s the best way to make sure you’re actually causing change instead of just daydreaming about it.

A financial detox is easier than most small business owners think. Just follow our advice above (or as much of it as you can) and you’ll be well on your way.


Ivan Serrano is a writer specializing in technology. He is from San Jose, California, and attended high school at Valley Christian High School (go Warriors!). Despite getting into several colleges out of high school, he decided to attend a local community college, while working at a Best Buy, to save money for tuition. After two years, he transferred to San Francisco State University (go Gators!), and graduated with a double major in English (concentration in Creative Writing) and Journalism (with a concentration in photojournalism). In his free time, Ivan enjoys working out, marveling at the wonders of modern technology, photography, and spending time with his dog, Miguel.

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