SMEs play a vital role in the economy. In the two decades between 1993 and 2013, they created 63 percent of the new jobs in America – acting as the engine room for the economic growth of the nation.

It benefits us all if our SMEs survive and thrive. However, if they fail to keep on top of their finances then the harsh realities of the market will bite.

So, how do they stay afloat?  Here are five tips to help SMEs to stay in control of their finances :

1. Have a plan and stick to it
   

A well-thought-out business plan is essential for any SME. It underpins everything you do – setting out small, medium and long term goals. This document should establish clear and robust costings for your business. If you can’t say how you’ll fund something then you shouldn’t be doing it. You should refer back to this regularly to track progress against your projections and keep a close eye on how accurate these were. If you outperform expectations, don’t get carried away. By trying to do too much too early you’re likely to fail.

2. Use software to ease the burden

While you don’t want to get bogged down with paperwork, you do have a responsibility to ensure that your books are up to date and your taxes are paid in full and on time. That’s where software can really help. Modern packages are cost effective and allow you to track the money coming in and out of your business. Companies such as QuickBooksallow you to produce tax forms, checks, deposit slips and even business envelopes from within its software – freeing up your time to go and make some serious money.

3. Be ruthless

The less you have to spend, the more likely you are to be able to stay in control. Be ruthless and crack down on every single cent of wasted spending – while taking the time to look for the most cost-effective solution for everything you need to buy. Don’t buy anything that you don’t need, but if you must purchase equipment, consider equipment financing options to reduce the burden on your personal finances.

3. Know your boundaries

When do work life stop and home life begin? For many businesses, the boundaries can be blurred between the two, and if you don’t have a clear demarcation between the two, then it will be hard to remain in control of your affairs. You need to avoid mixing up key documents and receipts and creating confusion. You also need to make sure you’re fresh and mentally prepared to make calm decisions while at work.

5. Listen

You need to remember that there are plenty of people out there who can help with your business. Whether it’s calling in the support of an expert financial advisor, networking with others in your sector or talking to trusted friends – tapping into the knowledge banks of others will help you to gain and retain control of your finances, giving you some handy hints and neat tricks to take into your own practice.
Do share your thoughts about these finance tips and what advantage it will have for young entrepreneurs in our comment section below.

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