Many small businesses have been struggling financially during the COVID-19 pandemic.

Financial tips for small businesses

November 27, 2020 9:36 am Published by Leave your thoughts

If you're a small business owner, finances are more than likely one of your top three obstacles. Now add a global pandemic, natural disasters, a presidential election and more to the mix. Summed up — the past year has not been easy on small businesses. Are you struggling to make ends meet? Here are some financial tips for small businesses following the COVID-19 outbreak.

Create a budget
Creating an annual budget is a great start for small businesses that are struggling financially. Onrec notes that it will not only prevent you from making impulse buys, but it also allows you to make sure that your business is actually making money. Obviously, no business can survive spending more money than they bring in.

It's also important to understand how much of your workforce you truly need. How many employees do you really need? How many employees do you have? This is necessary to think about when it comes to saving money due to the fact that employees are a huge expense.

Be aware of all costs
This tip goes hand-in-hand with creating a budget: don't underestimate costs, Gulf News advises. For example, having an office space during a pandemic. Rent, electricity, phone and internet and more add up. Consider moving your business remote (if this makes sense for your business) to save money.

Create a cash reserve
Creating a cash reserve will make it much easier for your business to get through tough times. Gulf News explains that a cash reserve can help you pay employees and suppliers even during financial downturn, and can even act as a financial buffer if clients pay slowly or over an extended period of time.

Cloud-based accounting solution
Investing in a cloud-based accounting solution is a great way to save money in the long run. This way, you'll not only have the benefits of ease of use (electronic records of transactions, accessible from anywhere) but also helpful insights about your finances. This includes financial data that ensures that your business isn't spending more money than it's making.

Are you a small business owner in need of legal advice? The Law Offices of Donald W. Hudspeth, P.C. are here to help with all of your small business legal needs by assisting businesses with corporate matters and various other types of legal concerns. Please call 866-696-2033 or contact the firm online to make an appointment.

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