Small businesses that operate on a micro-level require basic finance and accounting knowledge to make informed decisions in the course of running their business. However, many entrepreneurs prefer outsourcing their accounting and audit work to experts who are fully equipped in the field.
Even with this, it is still required of small business owners to have the rudiments and basic knowledge of bookkeeping and also ensure Regulatory compliance with bookkeeping and financial standards. It is until when they have the basic knowledge will they be able to relate favorably with whatever decision that comes out of their business accounting report.
Below are the do’s and don’ts of small business accounting, based on consumer criticism. It’s basic knowledge required by small business owners for the smooth operation of their ventures.
Do: Invest In Your Team and Embrace People’s Management
Management experts have confirmed that investing in people or employees is a very pivot to increasing business productivity. The better informed and professional the business workforce appears; the higher will be their marginal productivity and the business revenue. On this note, small business owners need the people management aura to motivate their team to do the unbelievable.
Do: Choose Stakeholders that Care About the Business Mission Statement
Business stakeholders are one of the internal environment elements that affect businesses in the course of profitability and goodwill attainment. Small business owners need to be tactical and rational while choosing who to work with, and where to raise funds for their businesses.
Therefore, monetary factors should not only be considered while dealing with or choosing stakeholders but the values, skills, and motivation these individuals will bring into the business. Concentration should however be given to people rather than capital.
Good people with good business ethics become good ambassadors of the business and help to minimize consumer criticism and enhance goodwill. This set of people should be those who will share in the mission statement of the business rather than being concerned about their returns on investment.
Do: Employ Technology to Save On Startup Costs
Experts have confirmed that the startup costs of doing any business are a determinant of the business revenue margin and sustainability. Gone are those eras when starting a business requires huge capital outlay.
Today, technology has made its much easier and less costly to start businesses through the use of the online platform, SEO tools and management tools and social media business tools (Zoom, LinkedIn, Twitter, etc.) that eliminate the need to travel far distance for meetings and the likes of PayPal that makes payment easier to effect with business partners. As a small business owner, leveraging technology is a hidden treasure to reducing the cost of doing business.
Don’t: Don’t Just Spend on Your Business, Budget
Business budget curbs irrational spending and enhances accountability. Small business owners need a budget to envisage future costs and sales forecasts for the business.
This plan will control the spending habits of the business owners and help prioritize what is required and not required in running the business.
For instance, the budget tells if the business requires more employees or not, and enhances good decisions based on the business metrics used.
Don’t: Aim for the Money
The major focus of many small business owners is to make money, even to the detriment of what they stand to offer. Creating values and meaning out of goods and services offered for sale is worth it rather than being after the money alone.
Evidence shows that consumers always come back to buy from businesses that sell good experiences with their commodities. Therefore, small businesses should always strive to create meaning in whatever they offer for sale.
Small business owners have to learn a great deal when it comes to running their business and managing the business finances. With the finance tips discussed above, most business owners who do not have finance knowledge can now leverage these basic bookkeeping and finance ideas which matter to their business as they journey through the path of the unknown.