Spring is often the time of year when we declutter and reorganize our offices and homes. For small business owners, spring is the perfect time of year to organize finances and we’ve shared tips to help.
Every small business owner can benefit from reviewing their finances. We have five great tips that will help you organize your finances and stay on track this spring.
Five Financial Spring-Cleaning Tips for Small Businesses
#1 Revisit Your Business Plan
Since some businesses are closed due to COVID-19, you may have some extra time to review your business plan to consider making updates that will reflect your current business goals and needs. If you don’t have one, now is the perfect time to create one. Business plans serve as guides throughout the lifecycle of your business and can help you set measurable goals. Furthermore, considering how significantly the pandemic has altered how we work, it may be a great time to pivot your business services.
If you need assistance with writing a business plan, we recommend visiting Ontario Business Central for guidance and support.
#2 Manage Your Cash Flow
An important aspect of running a business is profitability. One best practice is to check your business’s cash flow weekly to ensure you are not only profitable but that you have a healthy cash flow – you don’t want your profits stuck in accounts receivables.
#3 Assess Your Pricing
Whether you sell products or offer services, optimizing your pricing is an essential part of staying profitable. You may even want to review your competitors’ prices to gauge if they are comparable. That will help ensure you’re not selling yourself short or driving customers away by charging too much.
#4 Review Payment Policies
Late payments negatively impact cash flow so you must determine what percentage of customers are taking too long to pay. Having this information will allow you to organize your unpaid debts more easily and decide whether you should restructure your payment policies.
#5 Re-negotiate Long-term Contracts
Many businesses enter into long-term service contracts to save money. However, changing business scenarios may mean you might want to re-negotiate these long-term contracts to determine whether there’s an opportunity to save money.