INTRODUCTION
“Failing to plan is planning to fail.” — Benjamin Franklin
Financial management is critical to success. That means knowing what money is coming in, what money is going out, and where it is coming from and going to.
DEFINITION
What is financial management?
- Defined as dealing with and analyzing money and investments for a person or a business to help make business decisions.
- The process of handling your business’s finances through budgeting, setting goals, tracking expenses and income, and investing.
- Money management involves handling business finances, and it involves setting goals, having a practical budget, tracking your expenses and income, and making smart investment decisions.
ADVANTAGES
What are the advantages of financial management for a business ?
OPERATIONS : Smooth running of operations. Flow of finances to fund expenses adequately.
DEBTS : Avoiding and taking any unnecessary debt by the company and provides the Security to your business and family
PROFITS : Increases profits and Assures business grow
DECISION : Facilitate Better Decision Making (collects and provides all financial information regarding the business, a greater confidence in your decision-making.)
PERFOMANCE: Monitor performance over a period of time
TRANSPARENCY: Faster access to cash and data. Improved clarity and focus
FINANCIAL PLANNING BEFORE STARTING YOUR BUSINESS
How to build good foundations to have a successful business?
ESTIMATE YOUR EXPENSES
How much does it cost you to pay your future expenses each month ?
CALCULATE YOUR FINANCIAL RESOURCES
how much capital (funds) you will have and revenue you’ll be able to generate each month during the start-up period ?
ESTABLISH FINANCIAL GOALS
What daily, weekly and monthly goals will increase revenue for growth ?
OBSERVE YOUR PROBABLE CLIENT
Do you have the predictable client who are eager for your products or services?
AUTOMATE YOUR ENTIRE FINANCES
What APP, Software or systems to better manage the finances?
SEPARATE YOUR PERSONAL AND BUSINESS BANKING ACCOUNTS
WAYS TO MANAGING FINANCES
How to manage business finances for growth?
TRACK YOUR EXPENSES
This step Will allow you to monitor the growth of the business, build financial statements, keep track of deductible expenses
BOOKKEEPING
It gives you a clear picture of where your money is going and where your revenue is coming from
MAKE FINANCIAL PROJECTIONS
This will help you to anticipate and address possible future obstacles and expansion opportunity.
FOCUS ON EXPENDITURE
Keep expenses costs as low as possible
SET UP GOOD FINANCIAL HABITS
set time to review and update financial information
TIPS and TOOLS TO ACHIEVE THIS
How to manage business finances for growth?
* Don’t get lazy when it comes to invoicing
* Don’t spend prematurely
* Keep track of personal loans to your business
* Create a rainy day fund (e.g. 2020 COVID19)
* Digital Money is best
* Put your printed receipt in one place (box)
* Two money management tips are straightforward but
can be hard to accomplish: decrease expenses and increase income.
