If your business has plenty of working capital available and a strong source of revenue, congratulations! Those conditions make managing your operations much easier. Realistically, though, many companies fall outside that working capital utopia.
Some small businesses have to find ways to continue growing while balancing a tight monthly budget. You can have success, you just need to use finesse when it comes to small business loans and financing options. Follow these tips for greater success.
Organize Your Expenses
The first step in having a practical budget is knowing exactly where your money is going. That means keeping track of all of your outgoing funds during a month. Some expenses are unavoidable, such as taxes, rent, payroll, and similar operating expenses.
A common slipup is forgetting to record smaller purchases, such as gas for your company fleet, shipping costs, and other bills. Don’t forget to look at the cost of paying overtime to employees as well.
Prioritize
Next, organize your expenses by the most important items first. It’s rough because your business needs things other than core needs to stay healthy and grow, but you have to protect your finances first. Marketing is essential, but you can often adjust the type of marketing you use to reduce your costs if needed.
Know Your Revenue Patterns Well
In some industries, revenue is hard to accurately predict, but there are usually at least some indications of what you can expect from clients. For example, construction businesses can’t entirely know how many projects they will have during the year or how lucrative they will be, but there are patterns in times of greater activity and lower activity.
Once you have a target revenue for each month, you’re better prepared to know how much financing you need to make up the difference. You can also decide what type of payments you can afford in terms of leasing or loans.
Use Small Business Loans
Wherever possible, a small business owner should prioritize SBA loans for financing. These loans take longer to get approved for, but their low-interest rates can save you a huge amount of money compared to other options. By planning, you can reach your goals and save money at the same time.
Protect Your Cash Flow
You may also need supplementary financing, such as invoice factoring, to keep your cash flow healthy. Don’t overdo it, though. Focus on helping with gaps in financing, not relying on these options to fund your business operations.
Seek Expert Assistance
At My Commercial Capital, we can provide your business with the working capital you need to grow. Our commercial finance solutions are structured to provide maximum benefits to borrowers. We treat our borrowers very well, which is how they know they can trust us with all of their financing needs.