After some time away from the entrepreneurial life due to personal or family-related reasons, you may find today’s financial landscape both familiar and evolved once you return to lead your business again. Rather than getting scared about what awaits you, it would be good to see your re-entry into the life of a business owner as an opportunity to refine and optimize your current approach to finance.
One practical way to do so is to ensure that your banking practices align seamlessly with the changing needs of your company, as this is what will improve your bottom line and bring you closer to the financial momentum you need. Here are some useful tips to guide mompreneurs like you when it comes to using modern business banking tools and strengthening your financial prospects:
1) Review and Update Your Financial Records
As you step back into the entrepreneurial arena, the first order of business is to review and update your financial records. This process should involve a comprehensive examination of your business accounts, ensuring their accuracy and completeness.
Take the time to reconcile any discrepancies, verify transaction details, and confirm that all your financial documentation is up to date. Clear and precise financial records will provide you with a solid foundation for nurturing your business’s financial health, and they will also serve as a crucial reference point for strategic decision-making.
Beyond the routine aspect of record-keeping, consider the narrative your financial records tell about your business. Track your spending patterns, identify areas of consistent growth or potential concerns, and use this information to shape your financial strategy.
Whether you’re seeking external financing or evaluating your budget, having meticulously updated financial records will position you to make better-informed choices about how to run your business and facilitate a smoother transition back into the rhythms of entrepreneurial life.
2) Assess Your Cash Flow and Budget
With your financial records in order, the next step is to assess your business’s cash flow and establish a realistic budget. Begin by learning what you can about your current sources of income and the various expenses your business incurs. This evaluation will provide clarity on the financial ebbs and flows within your company, enabling you to identify potential challenges or opportunities down the road.
Be sure to create a budget that aligns with your business goals and financial capabilities, and be realistic about your projections by considering both your fixed and variable expenses. A well-crafted budget will be a reliable financial roadmap for guiding your spending decisions and allowing you to allocate your resources strategically.
Now that you’re earnestly balancing life as a mom and an entrepreneur, a clear understanding of your cash flow and a well-defined budget will serve as invaluable tools for navigating new financial challenges and steering your mom-run business toward sustainable growth.
3) Reevaluate Your Current Banking Service
Next, take a moment to reassess the banking services you currently utilize. Banks often offer a range of features that are specially tailored for businesses, including business credit cards, online business banking tools, and business loans.
Consider whether your existing banking relationship still aligns with your business needs. Better yet, explore additional services that might enhance your financial management, streamline your transactions, or provide opportunities for further growth. Mompreneurs based in the Philippines, for example, can check out Maya Business Deposit, an efficient small business online banking solution that also promises an exceptional 2.5% per annum interest rate.
4) Explore New Financing Options
If your business requires an infusion of capital, the post-pause phase is an opportune time to explore new financing options. Whether it’s for expanding your operations, launching a new product line, or addressing your immediate financial needs, knowing which financing avenues are available to your business will empower you to make balanced and growth-spurring decisions.
Check out new business loans, lines of credit, and alternative financing methods if you haven’t already. Compare terms, interest rates, and repayment schedules as well to identify the option that best aligns with your current business goals.
5) Automate Your Finances
Efficiency is key when you reintegrate into the daily operations of your business. Wherever it’s applicable, embrace automation to streamline your financial processes and reduce the administrative burden on you and your staff.
Set up automatic payments for recurring expenses, for instance, and use online invoicing tools. You can also implement accounting software to digitize your financial management. Automation not only saves time but also minimizes the risk of manual errors. This kind of technology can help you create a more efficient and accurate financial system for your business and, in turn, allow you to focus on the strategic aspects of your business and your responsibilities as a parent.
6) Make It a Point to Separate Your Personal and Business Finances
One particularly important banking and finance practice that mompreneurs should observe is separating their personal and business finances. You’ll want to establish distinct bank accounts and credit cards for your business transactions and your day-to-day transactions for yourself and your family.
Separating your finances in this way simplifies your bookkeeping and provides transparency into your business’s financial performance. Clearly defined financial boundaries also enable you to track your business-related expenses accurately, making tax preparation more straightforward and ensuring that your personal and business finances remain distinct entities.
7) Stay Informed on Your Tax Obligations
It may seem intimidating, but you’ll also want to stay on top of your tax obligations and deadlines. Familiarize yourself with any changes in tax laws that might impact your financial responsibilities and how much time and effort you dedicate to routine business banking-related tasks.
If you have a hard time wrapping your head around things, don’t hesitate to ask your accountant or a tax professional about them. They can give you tailored advice based on your specific business structure and financial activities, too.
8) Build an Emergency Fund
Now is also the best time to establish or replenish your emergency fund to fortify the financial resilience of your business. An emergency fund will serve as a financial safety net that can protect your mom-run business against unforeseen expenses or economic uncertainties.
As you re-engage with your business, be sure to allocate funds toward building or reinforcing this essential resource. The peace of mind that comes with having an emergency fund will allow you to navigate upcoming financial challenges with greater confidence, ensuring that your business remains stable and adaptable in the face of unexpected circumstances.
9) Negotiate Fees and Rates
Lastly, be sure to take a more proactive approach to managing your business costs by negotiating fees and rates with your bank. It can be with regard to your transaction fees, account maintenance charges, or interest rates on loans; regardless, engaging in these discussions with your bank can lead to significant cost savings for your business.
Before entering negotiations with a potential financial services provider, do your research on industry standards and compare the terms offered by other financial institutions. Presenting well-informed arguments and showcasing your business’s financial stability can also strengthen your negotiating position.
Overall, more favorable terms will allow you to optimize your banking relationship. It’s also a practical way of reducing unnecessary expenses and enhancing the overall financial efficiency of your venture.
The financial decisions you make today will lay the groundwork for the success and sustainability of your mom-run business, and perhaps even give you more to pass down to the next generation if you so wish. Knowing that, look forward to the opportunity to recraft your financial management approach and to head a business that you can be proud of as both an entrepreneur and a hardworking mother.
