Key Takeaways
- Using these 5 tips from expert CPAs can help you maximize your profitability
- Taking actions like checking in with your business financials, maintaining relationships with your customer, and keeping in good touch with vendors can all boost your bottom line
- Looking at long-term funding options like SBA loans helps you avoid high-interest debt that eat away at profits
Small business owners, we see you—working hard, sending late night emails, rushing from meeting to meeting. You oversee tons of tiny details every day that keep your business up and running, and you want to make sure that all of that work turns into profit as you serve your clients and customers.
With everything there is to balance while running a small business, we know that every minute matters. That’s why we tapped top CPAs for expert advice and a few resources to help maximize your profits without adding too much to your plate.
1. Embrace the financial side of the business
Embracing the financial side of the business means understanding the basics—balance sheets, assets versus liabilities, bills, sales and costs trends, and key metrics that indicate how well the business is doing. It’s the difference between working in the business versus on the business.
This can seem overwhelming at first, so business owners can start small by creating a budget and watching their cash flow to determine when money is flowing in and out. Taking a bit of time each month to go over your finances, check in with your budget, and review financial statements can go a long way towards understanding the financial side of things. This step will ultimately help you see areas that need to be tweaked in order to maximize your profits.
2. Keep accurate and timely financial records
To build off of the first tip, your business financials should be accurate and timely. This means not waiting six months to check in with your budget or review P&L statements. Setting up a budget and then checking your actual incoming and outgoing funds against it on a regular basis will allow you to stay up-to-date on where your money is coming from and where it’s going. A great way to do this is to work with a qualified bookkeeper or accountant. You should meet with them at least twice per year to review the business financials.
If you’re working with outdated financials, it’s hard to make decisions that reflect the current state of the business. Keeping accurate and timely financials, however, allows you to make real-time adjustments to the business, negotiate with vendors when necessary, and plan for the future.
3. Stay in touch with vendors
Good communication is important in any relationship, and that includes your relationship with your vendors. Staying in touch with them, for instance, may allow you to know when price increases are coming. As things change in the business’s market and the economy as a whole, these relationships can lead to savings as you negotiate prices or payment terms. This is typically an easier conversation to have when you have an existing relationship with them.
4. Think about long-term funding options
When you need to make an investment in your business, it can be tempting to reach for a credit card to cover the expense, but that may not be the best long term choice for your business. Credit cards come with relatively high interest rates and if you’re not able to make your payment, it can impact your credit score and cause you to accumulate interest.
Rather than using a credit card, you can seek longer term loans like a Microloan or SBA 7(a) loan with RBAC. These loans are flexible, affordable and come with predictable monthly payments that allow you to plan for future cash flow and stick to your budget to maximize profits.
5. Build strong relationships with customers
Your clients and customers are why you’re in business in the first place, so fostering those relationships can spell success for your company. Just as communicating with vendors can keep the relationship healthy, communicating with and showing appreciation for your customers can build a strong relationship that will continue for years to come.
Hosting customer appreciation events, sending a holiday basket as a way of saying thanks, and giving great customer service can build that relationship and lead to customer loyalty. The business from loyal, repeat customers is essential for maximizing your profits and achieving long-term financial health. Plus, their recommendations can attract new business. Having a strong relationship also makes it easier to contact customers if their accounts are outstanding and you need to work out a payment agreement.
Partner with RBAC to maximize your profits
At RBAC, we’ll be your partner as you grow your business, and we’ll cheer you on every step of the way. Our SBA loan programs allow us to support you and your business as you work to fund your projects and maximize your profits.
When you come to us, we’ll look at your current financial statements, but we’ll also listen to your dreams and work hard to offer the right lending for your situation. Whether you need a microloan to cover unexpected expenses, an SBA 504 loan to purchase real estate, or an SBA 7(a) loan to expand your operations or purchase equipment, we’ll work with you to make the right moves.
