Every year, millions of people make New Year’s resolutions, hoping to improve some aspect of their lives. As a small business owner, you probably have many ideas about how to improve your finances in 2024. But with so many opportunities, where should you begin? Start by reading up on these 5 financial tips for a prosperous 2024.
1 | Set Measurable Financial Goals
2024 is the year to think big for your business. What do you want to achieve this year? Setting measurable financial goals is the first step toward ensuring your business is prosperous in 2024.
The best goals are “S.M.A.R.T.” – specific, measurable, acheivable, realistic, and timely. Instead of setting a general goal such as “I’ll increase my profit in 2024”, try “I’ll increase my profit 10% by December 31, 2024”.
2 | Create a Budget to Achieve Your Goals
The next financial tip for a prosperous new year is to think about how you’ll achieve the financial goals you just set. Whether you want to maximize profit, expand operations to a new location, pay down debt, or hire new employees, a budget is the key to your success.
Think of it as GPS for your small business. A well-crafted budget charts the course to your desired destination and helps you navigate roadblocks you may encounter along the way. It provides the road map for achieving your goals and the yardstick for measuring whether your performance is on or off track.
When you compare your monthly financial results to your budget, you can spot warning signs of a potential problem. Then, you can take corrective action to avoid unfavorable results. And, if you find that you’re achieving or exceeding your goals, you’ll have a reason to celebrate!
Still not convinced? Learn why budgeting is so important for the success of your small business.
3 | Stay on Top of Your Numbers
It’s critically important for business owners to review and understand their financial results. Timely, accurate, and meaningful financial reporting and analysis provides the information you need to successfully manage your business finances.
Was there a profit or loss last month? Why? What needs to change to ensure you achieve your profitability goals? Having insight into your numbers reveals opportunities to understand and improve your small business finances.
4 | Have a Backup Source of Cash
Ongoing cash deficits are the #1 reason small businesses fail. And aside from the obvious jeopardy your business will be in without steady cash flow, you’ll surely feel stressed and anxious about the future.
How do you avoid that risk and discomfort? Savvy business owners plan for seasonal cash shortages. How? Here are a few ways:
- Build cash reserves (an “emergency fund”)
- Obtain a working capital line of credit
- Monitor your accounts receivable. Ensure your customers are paying you on time. Immediately follow up with those who have past due bills.
- Maintain a cash forecast that predicts your future bank account balance. Today’s balance doesn’t give you visibility into your cash balance at the end of this month, next month, or six months from now.
Need more tips? Check out this article on common cash flow mistakes and how to avoid them.
5 | Know When to Ask for Help
It takes tenacity and perseverance to build a business. But as your business grows, so do the financial responsibilities, decisions, and demands for your time. It’s okay to ask for help.
As an educated and intelligent business owner, you might feel overwhelmed or embarrassed about your never-ending financial to-do list or challenges. Believing that you “should” be able to manage your business finances on your own won’t change the situation. Going it alone could result in compounding problems. Outsourcing to an expert makes the best use of your time and yields better, faster results.
If you’re struggling to keep up with your small business finances, set up a free introductory meeting to learn how Momentum CFO can help.
The Bottom Line
A new year brings new opportunities for greater small business success. These five simple financial tips are the foundation for a great 2024.
Have a happy, healthy, and prosperous new year!
About Momentum CFO
Momentum CFO is a boutique firm specializing in outsourced Chief Financial Officer services for small and midsize businesses. We bring the benefits of Fortune 500 financial expertise to your business without the expense of hiring a full-time CFO.