Money matters in business. Making a profit is the name of the game; every process and task you do, and every penny spent is going towards creating a business that generates income. So as a business owner, you need to be careful with you cash and make good decisions- here are a few things to consider.
Use a credit card that gives you rewards
Lots of businesses have to utilize credit at the start, when you have yet to turn a profit you need money to get up and running and get yourself off the ground. But not all credit is made equal, and as well as checking rates, you could also look into a card that rewards spending.
Take Chase Sapphire Preferred vs Captial One Venture cards for example, you can see the pros and cons of what each offers and which would be best suited to your business.
If you can get a little back whenever you spend, this can certainly make things easier for a growing, bootstrapped company.
Different credit card companies will have different features and rewards, so work out exactly what it is that your business will benefit from and go with that.
Even later down the line when you’re making a profit, it can be worth making business purchases on credit. This is because they’re covered if something goes wrong, and if you pay the bill in full each month you won’t accumulate any interest.
Know when to hire and when to buy
In the early days when you don’t have much money, hiring equipment to get started might be your only option.
But there are lots of benefits to this, that might make you consider continuing this even later on. For example, with hired equipment, maintenance and repairs are free so you save money if something goes wrong (providing it wasn’t damaged by you).
It also gives you the ability to own the most up to date equipment, which could be far more expensive than you could afford to pay outright.
Importantly, in the unfortunate event that business does go bad, then you don’t have to worry about selling equipment for a loss to recoup your costs. You can simply return it to the hire company.
In many cases, businesses will start off by hiring equipment and then eventually buy their own. But weigh up the pros and cons, it might still be worth the fee hire better quality equipment rather than spend a huge chunk of your own money.
Look into the pros and cons of outsourcing
As with hiring, there are lots of pros and cons of outsourcing vs keeping things in-house. Hiring your own employees can be expensive and time consuming, you have lots of legal obligations surrounding them which can be a lot of pressure for a growing business.
But on the plus side, you can train them up to do the job that you want and they can really add to your company. When it comes to outsourcing, you can hire freelancers and contractors. They are responsible for paying their own taxes and in many cases can work from their own home.
You can hire them on a project by project basis and so there is no worry of hiring a staff member and having to pay them regardless, whether there is work for them to do or not. This helps entrepreneurs save a great deal of money for improved business finances. Every little bit helps in entrepreneurship because a penny saved is a penny earned!