If you are a small business struggling with financial planning, this blog has all the solutions.
A massive number of competitors, no barriers to entry, and a looming dread of the COVID-19 pandemic can make it difficult to make ends meet if you are a small business owner.
Annually, approximately 95,000 new companies are founded in Canada. Up until December 2019, small businesses made up a whopping 97.2% of all the employer businesses in Canada and most of these small businesses are concentrated in Ontario.
Even though there are many reasons that can cause a small business to fall flat on its face, poor financial planning is at the forefront of it all.
This blog has all you need to know about managing your finances efficiently and keeping your business afloat.
Here’s an action plan that will be beneficial for your business:
1.Plough Back
Plough back is a technique that allows you to put your earnings back into the business. This helps your business grow because you are investing in it and aids in business improvement. The plough back technique also saves you from applying for loans with a huge interest rate or lending cost, protecting you from being exploited by loan sharks. In the long run, this will take money out of your business and leave you with credit bills.
2.Get a Loan
We know it sounds contradictory to the previous point but hear us out; this is a viable option to sustain your small business. During the pandemic, the Canadian government announced various attractive loan programs to support business operating on a small scale like CEBA (Canada Emergency Business Account), which provides interest-free loans for small businesses.
All you have to do is determine which one will be suitable for your business.
3.All You Have To Do Is Ask
The most convenient and hassle-free option is hiring a firm that aids businesses in managing their finances. We are one such firm; you can come to us with all your financing tribulations, and we can provide solutions to your financial planning problems.
We provide business advisory services toronto along with tax services for financial businesses Canada. Contact us here and let us take be the answer to your problems.
4.Manage Your Cash Flows Diligently
Having a negative and a very positive cash flow are alarming situations. Having a cash flow which is overwhelmingly positive indicates that you are not utilizing your liquid assets and are incurring opportunity cost by not investing.
Having a negative cash flow is also a terrible sign; it means you do not have enough cash to clear dues or as a backup for a rainy day.
Keep an eye out for expenses that are causing you to lose out on cash.
5.Nobody Puts Future in a Corner
The worst decision you can make with regards to your business is not planning for the future. When it comes to finance, you need to make sure that you solve your present problems, but at the same time, you should also think about your long term decisions and take action accordingly.
Not planning is a big mistake. Big. Huge.
These are some of the basic but very important steps you can take to ensure that your financial planning goes seamlessly. It doesn’t matter whether you run an ecommerce business or a physical one; financial planning is a crucial part of your business. Still have questions? Feel free to reach out to us!
