Accounting 101: How to Track Your Business Finances in the First Year

If you’re running your new business with little or no attention to expenses tracking, you’re flying blind.

The future of your business’s sustainability is anchored on your attitude to financial tracking.

It takes patience following rigorous steps to stabilize the future of your business.

You don’t need to be an expert in accounting and bookkeeping before you sustain your new business. You only need the information to succeed in your business finance.

In this post, I will show you how you can track your business finance in the first year.

What is Financial Tracking in Business?

Financial Tracking, also known as Expense Tracking, is a process of keeping records of your income and expenditure on a regular basis.

This is possible by monitoring every financial event associated with your business in a documentary form, ideally on a daily basis.

Financial activities monitoring happens by recording receipts, invoices, and business expenses into some form of the accounting ledger.

It gives you the information on whether you’re making a profit or a loss. And it works along with budgeting, which serves as a guide for your spending.

Why You Should Track Your Business Finance

Common value among business owners is to secure a prospective future for their investments. Meanwhile, your confidence in the future of your new business is tied to the benefits you stand to enjoy as you track your business finance.

Tracking your business finance;

Makes you a better money manager

The only instrument that can give you the confidence to stay on top of your budget, as a business owner, is through Financial Tracking. This could be on a daily, monthly, quarterly, or yearly basis, depending on your business needs.

Prepares you for tax season

Tracking your business finance will always set you on alert to be ready for your tax expenses. It reduces the time taken to prepare for this and secures your prime hours which could be invested in another aspect of the business growth.

Also, you have an idea ahead about what’s deductible for tax. You only need to approach your accountant to get a detailed list of tax-deductible business expenses.

Makes you reimburse your employees for any extra spending

This is one of the ways to build trust and commitment in the minds of your employees. They will develop the spirit of fair treatment in the course of their duties. This is one of the keys to move your business forward.

Eases your business forecasting

Flying blind in a business is disastrous to the future of that business. If your business finance is well tracked, you’ve paved the way for future stability. This is because it enables you to envision the complete picture of your business in the nearest future. As such, your business is secured with an awesome landing.

Financial tracking can make you determine the profitability of your business. This will assist you to offer your investors a better idea of your business revenue.

Opens your eyes to identify growth opportunities

If you track your financial activities, it will not only reveal the future prospects but also tap your consciousness against the potential threats that can mar your financial engagement.

Devising mechanisms to control the future obstacles, you identify growth opportunities which, if you leverage, your business will grow at a steady pace.

How to track your business finance (step-by-step Guide)

Tracking your business expenses is as important as other plannings like; business and strategic planning all of which are tailored towards the security of your business in the future.

Either you aim at getting the true picture of where your money is going or preparing for tax season, tracking your finances in and outflow is very crucial. Here are a few step-by-step to get it done:

1. Open A Bank Account

It’s wise of you as a business owner to keep your business income and expenses separate from personal and domestic finance. If you don’t have a sense of the disparity between the two, your business treasury is in the line. Plus, your personal financial engagement would be threatened all the time.

2. Select Cash or Accrual Accounting

Choose the appropriate account for your business from the cash and accrual accounting system just because it’s simple. The important thing is to opt for the most appropriate one to the level of your business.

Using cash accounting, you record transactions as they occur. You get to record your income when you receive money on sales and your expense when you payout.

However, accrual accounting has a more in-depth modality. You record your income as the product is sold, not until the payment is made to your account. The same thing happens to the expenses, take your record when you have the bill not when you pay.

Accrual accounting is part and parcel of the businesses with employees, large-scale businesses, and growing ventures.

3. Use A Cloud-Compliant Software

A cloud-based accounting tool is available to make your financial tracking activities very interesting. With this program, you can track your business finance anywhere at any time.

Also, it enables you to manage your business account, make it receivable and payable as the case may be.

Though, you have a choice to select from tons of this software that are available, ensure you choose the best for your business. You can, as well, use spreadsheet software like Microsoft Excel to keep track of your business finance.

4. Connect your Account with Financial institutions

This process makes it very easy to track all the expenses incurred by your business. Some businesses may be skeptical about this though, the truth is that it’s very safe, with in-built programs to protect your data.

Connecting your bank will avail you the opportunity to download all banking transactions automatically to your accounting software, and in some cases, have them automatically posted to the appropriate account.

5. Manage your receipt properly

Use the mobile app that is compliant with your accounting software program. In case the software doesn’t support it, choose to use an expense management application that will comply with your software.

With this, you can easily take a picture of your receipt and upload it on your software, store it for onward attachment to the appropriate expense.

6. Be Swift in Your Record Taking

You have learned in accounting 101 that your tracking records must take care of all the income and expenses. If you choose to connect your financial institutions to your software account, the process becomes daily automated.

Though, you need to set up your account properly to enjoy adequate allocation of the uploaded transactions.

Some applications accept manual data entry and some are automatic. You choose the suitable one for your business.

Whatever system you embrace, take a record of all your expenses promptly. Completing your bank reconciliations on a monthly basis helps to ensure that all transactions have been properly accounted for.

Conclusion

No doubt that your almost motive in your new business is formed around future stability. However, you can’t achieve this without proper knowledge of the financial flow of your investment.

If you track your business finances, you will envision the future of your new business from the first year of the setup. With this, you get control of every operation attached to money.

Now, follow the steps in this post and stay on top of the financial movement in your new business.

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How to Create a Strategic Plan for Your Growing Business

Businesses without strategic growth plans always die at a standstill. This happens when there isn’t a scale to measure business progress.

According to Abbakin, developing poor product development and citing your business in the wrong location top the list of failed businesses.
Only businesses with the right strategy plan this from the onset. To achieve this level, this step-by-step guide on how to create a strategic plan for your growing business is a must-read.

And to ensure that you don’t confuse strategic plans with business plans, let’s clear this coast first.

What is a Strategic Plan?

A strategic plan focuses on your business’s mid-to-long-term goals. It details the basic strategies for achieving growth. But, a business plan covers only your business’s short or mid-term goals and explains the steps necessary to fulfill them.

To create a strategic plan that will make your business survive and thrive longer, you must adopt a workable framework that is achievable within the time-bound.

Some people believe strategic planning is for large-scale businesses, but it’s not. Growth strategy is a must for every business size as long as they have great benefits to derive from it.

Having known this, ask yourself whether your growing business needs a strategic plan or not. But, the following points will assist you to answer that question.

Do you need a strategic plan for your growing business?

Never can you disregard the importance of a strategic plan in business operations. This is because a strategic plan will help you achieve:

Envision your business’ future over the next 3 to 5 years.
Define your long-term goal.
Study your current environment, strengths, weaknesses, opportunities, and threats.
Set timelines and responsibilities to turn your plan into reality.
Come up with tactics to tackle any identified problem.
Achieve your business’ potential by reducing the risk of flying blind.

Creating a strategic plan for your business doesn’t have to be cumbersome as some people think. All you need is to see who can help you describe how it flows.

Step-by-Step to Create a Strategic Plan for Your Growing Business

Before you can achieve your long-term goal, you need a strategic plan to guide you. Here are the step-by-step ways to create it:

Identify Your Competitive Strength

State the uniqueness of your business over the entirety of the competitors. This makes customers buy your product or service over your competitor’s. It fetched you that competitive edge and profits.
Many businesses make deliberate decisions to stand out from the market pool. They leverage their energy and uniqueness to win over a large market share.
It isn’t out of place if you wish to include your competitive advantage in your mission or vision statement.

State your purpose

Your mission statement is your business’s purpose. It’s the reason why you’re in the market.
Getting this statement right is important. This is because it helps you form a growth framework for the day-to-day operation and guides your decision-making.
Ensure that you craft this statement in such as way that your customers feel that your business you create the business for them.
Make it seem that your business exists to proffer solutions to their problems.

Visualize the future

Here, you form a mental picture of what your business should look like in the future.

It’s called a strategic vision because it leads your business through the direction to locate your desired position in the future.

Before drafting your vision statement, envisage what you want to famous for in the next 5 – 10 years. List your company’s resources human and materials to determine your current level and visualize the future.

Also, study the external challenges, the position of the competitors, sales threats, and a global condition that could harm your business.
These and many others will give you a good direction to tailor your vision statement.

Design Your Customers’ Profile

Your customers are at the center here. The question is how can you serve them better?
Study your customers’ questions and characteristics. Then, create motivations around your services to them. Ensure you improve your performance to grow your customer base.

Draft Your Goals and Objectives

Viable goals and objectives get their development from the SWOT analysis and customer profiling charts.

Build the goals and objectives on your strengths while propping up your weaknesses, focusing on your opportunity, and identifying your threats.
Your goal must be measurable, quantifiable, and supportive of your objectives.

Effective goals must state how much of what kind of performance by when is to be accomplished and by whom.

Assess your resources

After setting up the goals and objectives, assess the financial and human resources at your disposal.
Identify which goals are financial-driven, and check whether you have the manpower to fulfill your plan, then recognize these goals as the key and rank them.

Develop an Action Plan

Your action plans are specific actions you set forth as a guide to implementing your goals and objectives.

This comes easy if you identify what obstacles exist to hinder your goal achievement.

Develop action items against problems and assign responsibilities and timeframe for the implementation.

Keep Track of Your Goal

Once your goals are stated, come up with measurements and targets on a spreadsheet.

Use the framework as a guide to achieving your vision. You can conveniently track your progress using this material.

Make Strategy a Habit

Brace up the plan with people, time, fund, system, and more importantly communication.

A strategic meeting must be held on a monthly or quarterly basis for a progress report and amendment in needed areas.
Ensure you’re flexible to yield towards environmental demands.

Conclusion

Your strategic plan is a roadmap to the success of your business. Conduct a proper self-assessment first, choose an effective team, take relevant data, and devise a working mechanism for adequate monitoring.

Connect your vision and mission to your goals and objectives and make them realistic. Be ready to take corrective action where necessary and ensure you’re managing your available resources; human and capital.

With this strategy, your business will stay longer in the market beyond your imagination.

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How to Boost your Online Business without Google Ads

Your business is as good as non-existent if no one knows that it exists.

You must find every means to get your business to your target clients. There are several ways to achieve this. Leveraging Google is one of the most popular.

According to Jeremiah Owyang, “Google is the new corporate home page”.

What this imply is that it will be difficult for corporate entities, entrepreneurs, and other businesses to sustain their conversions and revenue streams without leveraging Google Ads?

Irrespective of the wide coverage and usage of the Google platform, there are tons of options that can give you your desired business promotion.

Truly, online adverts will generate huge conversions foryour business. It will open your business to the world and help it cut thorough the online noise.

In this post, I will show you how you can boost your online business without using Google Ads.

Let’s begin.

What is Google Ads?

Also known as Google AdWords, Google’s advertising is the Google platform where advertisers order specific keywords, associated with their business, and done in a such a pattern that their clickable ads appear on Google pages at a search by customers.

Advertisers pay for this bid for Google to make its revenue which is a charge per click.

For instance, if a user puts up a bid, Google will ex-tray their robust database of ads within a few seconds and come up with appropriate keywords that match the query in an orderly form.

This is possible because Google recognizes every available ad on their database.

But then you may ask that which ad wins the top page of the searched results. This depends on a series of factors which includes bidding size by the advertisers and the quality of the ad itself.

Why you should boost your business.

The motive of every business is to grow at a steady pace. This growth is the engine that drives the business to higher revenue streams.

Apart from paving ways for your in-flow capital, boosting your business will flesh up your income, avail you new opportunities, and convert more customers for your business patronage.

Though expanding your business comes with its risks, understanding the pros and cons of boosting your business is important before you begin to boost your ads.

Boosting your business allows you to leverage economies of scale to increase in your production output and reduce product costs per unit.

It will also provide route to expand your business and influence the market price. With that, you attain independence in your business operation due to external risks reduction.

Now you will have greater financial viability for your business and many financial institutions will trust your expertise and market strength.

How to boost your business without Google Ads

As much as the benefits of boosting your business amass, here are ways to produce long-term marketing results for your business without investing a dime in Google ads.

1. Search engine optimization (SEO)

Advertisers reach out to their customers through Google Ads, but it’s most likely that their adverts don’t appear on every search. This could be as a result of the difference in the keywords or competitors bidding higher on that same keywords.

Instead of letting your adverts be conditioned with some factors before reaching your targets, use search engine optimization (SEO) to appear more often over a longer time.

Your site won’t get to the top overnight, however, it has the potential to last longer and fetch you a long-term benefit without advertising charges.

2. Content marketing

One of the motives of pay per click strategy is to make your site available for your customers. It serves the potential customers that are actively searching for your business.

Creating highly converting content in your website can serve this purpose for you, but ensure your themes come around what your business offers. You can use this to answer some related questions as well.

You can also create visual contents that tie down the customers for you.

Make your content a source of ideas for other bloggers. Plus, relevant videos and infographics that can be pitched to relevant investors’ sites.

3. Email Marketing

This is a way to be in steady contact with people on your mail list.

Instead of being particular on how to reach out to the new customers, email marketing will work for you to maintain your past and current customers.

Though the role of advertising in online marketing is crucial, you don’t have 100% assurance that the copy usually gets to your prospects at times.

But, through email marketing, you reach out to the people on your mail list directly and pave way for a referral.

Instill a sense of belonging in the mind of your customers with frequent follow-up emails after patronizing your sales. Carry them along with details about other products with a reasonable discount that appeals to them.

You can make it a point of responsibility to offer your customers an incentive for referring other customers to you. The result of this will boost the traffic to your site.

4. Social media

Social media is the marketplace where formal and informal interactions exist to promote a purpose. You have unlimited potential customers on these platforms whom you can reach without stress. You can as well run a paid advert here too.

Use this platform as a space for your sales promotion. Ensure you’re regular with your post and updates.

Depending on your strategy, you can decide to use a targeting tool to select people based on demography, age, interest, location, and gender, as the case may be. Just be aware you have unlimited prospects here, maximize it to boost your sales.

5. Referral programs

You ask your current customer to refer their friends and family. You can do this by placing a referral form above the fold in your web page for easy notice by the visitors.

Include a link in the referral form at the end of the order acknowledgment page. Also, at the end of every emails you send to your subscribers.

Send introductory notes to the names you collected in the process, sign-up information, and other calls to action. Be frequent in offering special deals, one, if not more of the referrals will take action.

Conclusion.

There’s no doubt that the internet is at the center of the world for markets and sales promotions. It’s a key to boost businesses and convert more customers for entrepreneurs and business owners.

However, this opportunity isn’t limited to Google Ads. By exploiting the above strategies, you can gain new customers and maintain the existing ones without being charged for advertising placement.

That said, you can always access more tools, trainings, and support for your business.

Stay glued to our social media channels and never miss updates anymore.

How to Create your Business Plan Yourself (A Quick 3-Step Guide)

Your business plan is the life wire of your business. It gives a directional head to your business ideas.

You could have a fantastic business idea but, if you don’t have a strategic plan documented to implement it in reality, the whole concept will be a mirage.

According to Investopedia, 20% of new businesses fold up within the first two years of opening, 45% within the first five years, 65% within the first ten years while 25% make it to fifteen years.

Reasons for this premature failure are poor market survey, deficiency in the business plan, little financing, and insecure location among others.

These reasons are all associated with a lack or inadequate business plan.

In this post, you will learn a step-by-step process to create your business plan yourself.

What is a Business Plan?

A business plan is a written guide that outlines the process of achieving a particular business goal. This document describes the future of your business.

It also serves as a management tool that allows you to analyze results, make strategic decisions, and describe how your business will operate and grow.

An effective business plan must address details such as business structure, product and services, the business vision, and how you intend to penetrate the market. It could also include your key team members, their strength, and the financial projections.

Just by answering these questions, you’ll already get the pointer on why you need a business plan for your new or existing business.

Why Do You Need A Business Plan?

Your business needs a plan so that you and your team would have a clear roadmap to achieve your business goals. A good business plan will also explain your financial projection to an institution looking to invest in you.

Having a business plan will help your business attract growth partners, boost your confidence when dealing with investors, and helps you live by a simple business budget to avoid extravagance.

The bi-dimensional purposes of a business plan provide makes it a structure that guides a business both internally in his dealings with stakeholders and externally with customers.

Here’s a quick 3 steps guide to create a business plan without necessarily paying a business plan writer to work on it.

3 Simple Steps to Create Your Business Plan

Developing a business plan is creating a document that details an actionable process to execute your business idea. For a basic plan, your document must sit on these guidelines.

Step 1. Conceive a business idea

Getting inspired is the core of business ideas.

As a promising entrepreneur, you should pay keen interest to the societal problems and try to profer a lasting solution to them. Remember a successful business stands to solve problems.

For instance; your neighbors always express their dissatisfaction with the types of cakes usually available for their wedding and birthday ceremonies, you can bring up a highly compelling concept.

Step 2. Embark On A Thorough Research

Once you have a business idea that is goal-oriented, step it up with research. This will provide insights to flesh up your business plan.

After collecting the needed data, now flesh out your business plan following the listed headings.

i. Executive Summary

This provides a quick preview of your business. Most times, experts advise that this section should be the last to pen when drafting your business plan.

This is important because you’d have run through every part of the plan before writing the summary.

And when writing this part, the questions highlighted below should prompt your process.

What is your business mission and vision?
What are your products or services i.e. your value proposition?
What is your company’s story?
What are your plans for growth?

Here’s an example of the executive summary of a company.

ii. Company overview

A company overview is like an elevator pitch. It is like a 30-second memorable description of what your company does and the operations. The motive here is to craft a simple copy that convinces anyone to invest in your business.

This is an avenue to provide brief answers to these questions:

What will your business offer?
What problems does it come to solve?
Who is your targeted customer?
How do you stand out among the competitors?

Next is your product and services,

iii. Products and services

This stage details your business model and expansion roadmap. Here, you’ll answer these questions:

What will the company sell?
How will the business fix down money for those products or services?
What is your pricing model? Be specific.
How does your pricing compare to that of your competitors?

iv. Market opportunity

Investors need to see the viability of your business. This is why your market survey must be extensive to answer questions like;

What is the size of your target market?
Who is your ideal customer?
What’s your potential for revenue?
Who is your competition?
How will you set yourself apart?

v. Market plan

Under the market plan, you’ll provide information on how to reach your clients.

While doing this, you need to include your market penetration plan. This could be the use of marketing tools like a website, social media and email marketing strategy.

How will you sell your products or services?
Will you sell directly to consumers or businesses?
Will your products be sold in unit or wholesale?
If you choose a third-party reseller, what kinds of retail outlets will you target?
What kind of advertising strategy will you focus on?

vi. Operational plan

Here, you present the details as comprehensive as possible on how you intend to run your business. By so doing, you’ll answer these questions:

How will products be manufactured or services be packaged?
Where will your offices or retail locations be?
What quality of employees do you need?
How do you plan to expand the business over time?

vii. Finances

Investors don’t overlook finances. They always have a keen interest in the financial section of your business plan. So ensure that you conduct deep research, and make the plan actionable.

Answer the questions below for this purpose:

What investments do you have already?
How much more funding do you need?
What are your current account balances?
What is your sales forecast?

Once you’ve provided extensive and realistic answers to the key questions about your intended business, you’ve done the important part of your business plan. What you need is to just polish it.

Remember, it is an advisable time to go back to your executive summary. It might need a review.

Step 3. Add The Finishing Touches To Your Business Plan

After writing your business plan, take a few days away from it.

This will ensure that you come back with a fresher view of it.

Read it over again for necessary corrections. Typos and grammatical errors present you as unprofessional.

Also, remove complicated sentences and redundant words from your written plan. You are not impressing anyone. Go straight and hit the nail on the important points.

You can as well give it to a friend who can take another reading over it.

Make sure that you keep it simple and straightforward.

Conclusion

The success of your proposed business is tied to your business plan.

If it’s well-drafted, fulfilling your set up goal will be a breeze.

But if otherwise, your business ideas will continue to suffer without seeing the light of the day.

In entrepreneurship, the prospects given by your business plan aren’t a small measure.

Once it’s a detailed business plan, it will empower you to secure investment, loans, and leases for your company.

Are you a business owner in Enugu State? The Enugu SME agency provides you with the resources, support, tools, and funding to grow and scale your business.

Follow us on all their social media platforms to keep yourself abreast of the opportunities in stock for you.

How to Place your Business on Google Local Listing

Google is the first platform that anyone goes to when they need information about anything.

For instance, new moms needing information about infants’ food, or students looking for information about the best college, and customers looking for a particular product head over to Google for the first feel.

Data published by StatCounter highlighted that Google leads the search engine market share by 92.41%. Bing is rated 2.46%, DuckDuckGo has 0.6%, and Yahoo, 1.48%.

Do you want your business to be locally viable, i.e to become easily accessible to people in your locality?

Then, you should explore Google Local Listing.

In this post, you will learn how to place your business on Google Local Listing.

But before we begin,

What is Google Local Listing

Google Local Listing means listing your business on your locality map so it appears at the top of Google’s first page results when people in your locality search for your business type.

These listings usually respond to the keywords customers search for through Google Maps and it comes with locality, e.g. Enugu Electricians or Plumbers in Enugu.

These local search results have a competitive edge when compared with other results that are based on algorithms and sponsored pay-per-click listings.

So, why do you need to place your business on Google local listing?

Why Do You Need to Place Your Business on Google Local Listing?

Having your business displayed on the first page of Google listings is good for your business.

Here’s why.

Increase traffic to your website

When people find your business on Google’s first page, your business will experience a huge visit which will result in increased customers and more profits.

Increase in website traffic will also boost your brand reach due to the map listing contained on your website.

For instance; a customer searching for grilled chicken in your locality could open Google Maps for a nearby Barbecue spot on the listing. If your business is just a kilometer away from his location, you’ve just scored a new customer without stress.

Your business enjoys credibility

When Google recognizes your business on its prime page, visitors tend to trust your product or services without any reservation.

The more your business is frequent on Google Local Listing, the higher the level of your patronage. Even if your store isn’t decorated with modern bricks, people will give you that initial respect.

Though, a sense of steady improvement and consistency in quality delivery will always keep your winning card for you.

Your business is on the legitimate side

If you have a business on Google Local Listing with a physical address, where people can easily locate you, then your business will breathe legitimacy.

People will be confident in dealings with you because your contact is accessible to the world.

Thinking of how to place your business of Google Local listing?

Don’t stress, you’re covered.

Here is the step-by-step guide to lead you through.

3 Steps to Putting your Business on Google Listing

Step 1. Check if you’re already listed

To begin this process first is to search for your business on Google Maps. This is to ensure that your business doesn’t already appear on Google listings.

If your business doesn’t appear on the list, then, you should move to the next step.

However, you’re to add up your business if it doesn’t show up. See the keyword pointed to by the red arrow, it doesn’t display among the brands in the listing.

Now, click the box in the arrow direction i.e. add a missing place to Google Maps, as indicated here, it will lead you to the next step.

Step 2. Create a place if you’re not yet listed

Click the prompt that displays in the search result to add your business as a place.

Then, fill in your name, address, and category. Your category selection is crucial because it allows your business to appear in results for searches other than your branding.

Finding in the category space is a drop-down box with similar categories but, you still have the option to type in your business keywords in the box, as directed with the arrow in the screenshot below. That will make you see the most closely matching categories.

Step 3. Update your Google Local Listing

After your business is added as a place on Google Maps, you still have another attempt to take because that doesn’t mean you’re there already.

Therefore, for your company to rank for searches relevant to your business and gain new customers, you need to update it.

To validate the above, all your information must be accurate and followed up with necessary updating, if need be. This will earn you the ownership power over your listing.

Now, go through the page below to update your business location on the map.

Having done this, the next is to hit the send box and have your business placed on Google Local Listing.

See the indication in the screenshot below:

After all this process, Google confirms your business address via a postcard that would be sent to you.

This postcard comes with a verification PIN, which you will input online to finish the whole process.

Conclusion

The importance of having your business on Google Local Listing is to ensure that your business is easily located by your potential clients, particularly in your locality.

This will inturn scale your search volume and boost your business for increased revenue streams.

Not only that, your business will achieve a legitimate feel that earns it more credibility and trustworthiness in the sight of potential customers. This could automaitcally convert accidental visitors to your satisfied clients.

Now is the time to place your business on Google local listing by following the process.

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How to Find a Business Idea that’s Right for You

“Ideas are the beginning point of every fortune”.

As submitted by Napoleon Hill, this assertion will drive an unimaginable inspiration to your mind as an emerging business owner.

Though not all ideas are perfect from the start. Some will take consistent review and tweaks to become a viable business.

Ideas create pictures for your business structure.

Thus, wrong ideas, no matter how great, can drag good business proposals into the mud.

Yes! because ideas are oxygen to your well-drafted business proposal before it blossoms into a successful venture.

This post set out to explore how to find a business idea that is right for your business.

But first,

What are business ideas?

Simply put, business ideas are those concepts formed on a primary purpose of financial gain which is usually based on a product or service that can be offered for money.

Ideas are like soil where business germinates. Because they form landmarks in the process of business set up. Once ideas are conceived, other parts of the business come to being.

Ideas are an integral part of business which are tied to their creators who must have identified the business values and prospects in a bid to set pace for a favorable competition in the market space.

Benefits of Having Ideas Before Starting a Business

Conceiving a business idea comes up with myriads of benefits especially, when the creator delivers a viable concept. This goes beyond fetching your business a huge turnover, but also links your business to a vibrant network.

Therefore, do consider the following benefits that are derivable from the ideas you have before starting up your business.

a. Creating a Revenue Stream

A well-conceived business idea tends to build a steady cash in-flow in the business. This is because every business is anchored on a working idea as it’s seen as a bedrock for a successful venture.

b. Realizing Active Cum Passive Income

A well-conceived business idea creates a brook of income for you as a business owner either you’re working or sleeping.

Your active income is paid when you deliver the value proposition to your clients. While the profit that flows in when you’re relaxing, catching fun with your family, or travelling is passive. This can be sales of merchandise, online created courses, or books and other vendible materials.

c. Building a Network

Core activities in idea building for a business are underpinned to two major purposes; determining the competitors and collaborators.

Identifying the competitors initiates a sense of creating a unique idea among the spectrum of existing ideas. This will secure a marketable space for your business in the market.

Also, finding the collaborators such as relevant associations, media outlets, and industry organisations among others, is a way to build a reliable stand for your business. This network will serve as a guidance and monitoring verve for your business activities.

d. Expansion and Brand Building

A single idea can spring into a successful brand and this will ultimately cause expansion of the business venture. For instance; a business idea could be initially to repair cell phones. The regular needs of accessories by the clients can initiate the sales of phone parts, and this can eventually transform the business to even the sales of computer and other parts technological devices.

On the above premise, a successful brand is formed and the level of the business expansion is noticeable. Meanwhile, all these are born out of a viable business idea.

How to Source For Business Ideas?

People need inspiration at times to swing into action on certain issues. Now, get inspired through any of this following for your business ideas:

i. Study successful entrepreneurs

It’s usually good if you set your foot on the path of successful ones. Read stories of the business tycoons and make them your models, believing they never attain the top without facing challenges.

ii. Look for a gap

Every business exists to bridge certain gaps around the tripod of the economic, social, and ecological system of a nation. Check where there is a space to fill, different ideas will visit your mind.

iii. Build on ideas

Businesses of different scales and sizes are thriving in the market, while some are facing out already. You can base your interest on a particular idea that isn’t appropriately executed by their owners and build a new one.

iv. Form knowledge through the quest of people

You can form ideas by doing deliberate research on what people need. The Internet and social media can be a good source of information here. Some people identify problems they encounter in using certain products or bidding for a particular service on different platforms, but less they think of solutions. As a business inclined person, you can develop ideas from their grievances to proffer solutions.

5 Steps to Finding an Impactful Business Idea

To come up with a working business idea, you need to factor in some realities one after the other. Here are the steps for you:

1. Get Inspired

Here, you derive your inspiration from any of the highlighted sources above. But mind you, you must identify the realm of that inspiration. Is it your comfort zone or your biggest frustration?

Check whether it is what you love doing. The things that give you excitement, satisfaction and fulfilment when you do them are in the realm of your comfort zone. It’ll be wise of you if it fetches you money. Develop ideas around it and monetize your passion.

On the other hand, the greatest business ideas are formed to solve problems. Proffering a solution to your biggest frustration can transform into a business idea. Tons of ideas are secreted within this realm.

Got it? …Yes! You have secured the first step in your business idea formation. Let’s see the next one.

2. Review the Concept

Either your initial idea is a product of what you like doing or a solution to what you hate, don’t convert it into business immediately.

Of course, you need to measure the viability of the concept beforehand.

You can do this by aligning it to the result of your study about the successful business moggles. Ask questions; which idea works for them? How does it work? What doesn’t work?

Answers to the above questions will help you review your idea before putting them into use.

3. Invest on your Concept

Here, bring your idea into life by investing the necessary resources that make it yield. In this stage, you may record several attempts before you will eventually get it right. That is why you need to spend reasonable time in the review stage. Just ensure you have zero fear for risk taking.

Do know that the money and time you invest on your business idea give it your desired shape. Therefore, be diligent in making needed sacrifice. But make sure you don’t leave your business ideas helpless. That takes us to the last step you need.

4. Monitor your concept

There must be a sense of follow-up in your business ideas. This will tap your consciousness when there’s a need to form a new brand as a result of expansion in your business idea.

Business Ideas and the Sustainable Development Goals (SDGs)

The SDGs are set to address the most pressing challenges in the global community within the stipulated time. It is important to tailor your business ideas to any of these goals as there are opportunities for business ventures to access global support when they participate in this journey.

Meanwhile, the SDGs alongside the 169 sub-goals can add flesh to business ideas. This is evident in the statement by Ban Ki-moon, former Secretary-General of the United Nations, that;

“The private sector is an indispensable partner for achieving the Sustainable Development Goals. Businesses can contribute as part of their core business. We, therefore, call on companies around the world to measure the impact of their actions, set ambitious targets and communicate their progress transparently.”

Measure your Business Idea: Does it work?

Inspiration to derive viable business ideas may not be the obstacle most times, the ability of the concept to work for what it’s created for takes the leading role.

Therefore, before your final conclusion, measure your business ideas through certain questions and work on the feedback derived in the process.

Now, establish interface between your business ideas and questions like;

Does it solve a problem?
Will people pay for it?
What’s your price point?
Is there a sizable niche market for it?
Are you passionate enough about it?
Have you tested your idea?
Are you open to advice?
How will you market your business?
Are you being realistic about your goals?

Conclusion.

To form a viable business idea, conducting a market survey to determine the competition level and professional collaborators is the key.

Any business aiming at success must utilise research as a weapon to determine which ideas work and which one do not. The outcome of such a finding will inform the right ideas that are good for your business.

And when you get the ideas fleshed up with a process, you can tap into the values provided by the Enugu SME Agency to step up your business.

Don’t take my word for it, watch business owners’ testimonies here:

How to Track, Plan, and Prepare your Small Business Budget

Running a business is tough.

This is because, with the ever-growing operational demands, it’s easy to run out of money. Lack of proper financial planning and budgeting, an unprepared business owner can run into debt within split seconds.

Even in developed countries like the US, 64% of small business owners begin with $10,000 in capital, and reports state that only 40% of these businesses are profitable.

So that begs the question, “Where did the money go?”

Many business owners only keep an eagle eye on their monthly account balance but this doesn’t save their business if they don’t correctly track, plan and budget their business.

In this post, I will show you how to track, plan and prepare your small business budget so that you can steer your business towards success in the coming years.

But before then,

Why Should You Set Budgets And Track Your Small Business

Setting a budget and tracking the expenses of your small business will help you stay on top of your business numbers. This spreadsheet will open up your current operating costs and sales, that way, you can be sure that you have enough money to keep your business running.

It will also help you to prepare solutions to potential problems. That unexpected information of increased rent or seasonal drop in sales can be daunting, but having your financials right will guide you on where to see the extra cash to cover the loops.

And because you’re particular about your business growth, setting a budget and tracking it will help you ascertain your business next level and identify the cost of getting there.

How To Track, Plan And Prepare A Budget For Your Business

1. Identify your revenue

Your take-off step in planning your budget is to identify the paths that bring money into your business every month. This will be tagged as your income before other expenses are deducted.

Also, you should record the income flow for six months or more to identify the pattern so that you can at least predict the recurring months. This will guide you to understand your best sales seasons and forecast future turnovers.

2. Deduct your fixed costs

After calculating your monthly income, the next is to find the total of your fixed costs. This fixed cost is any operational cost that you pay every month. It could also be daily, weekly, or yearly.

For instance, your office rent, fueling generator, salary payment or data subscription.

Now deduct your fixed cost from your income.

3. Identify your variable expenses

Aside from your fixed costs, other costs vary from time to time. These variable expenses are not necessary for your business, but they’re good to have for business success.

Examples could be the cost of employee personal development, the experience of entertaining a premium client, replacing old equipment or travel costs for an urgent business trip. Most times, variable costs are operational costs around utilities.

Smart business owners try to lower these variable costs as much as they can during low-profit months so that they don’t over-eat into their profits. However, in buoyant months, they take advantage of it to create a stronger impression.

4. Set aside miscellaneous fund

Miscellaneous costs mostly arise when you least expect. So as much as you can, ensure that you prevent these unexpected costs when budgeting for your business by ensuring that you have extra cash at hand to sort them.

You can put aside an emergency fund to take care of this anytime it’s needed. This will put you on your toes so when an emergency happens say an equipment breakdown or replace faulty furniture.

That said, you run your business by this maxim: If your budget for a problem, the emergency never arises. And if the emergency does show up? Well, you’ve budgeted for it. It’s not an emergency then, is it?

5. Create your profit & loss statement

Having been abreast of all the above information, next is to determine your profit and loss statement, or profit and loss.

Just talking about profit and loss can bring up feelings of anxiety.

But never mind, because you’ve already done all the work. All you need is the principle of addition and subtraction: Sum up your income for the month, add the expenses for the same month, and subtract the cash flow-out from cash flow-in to actualise your net worth for the period.

Should you record a surplus after this calculation, then you’re at the top of your business. However, it’s a deficit if the expenditure outweighs the income. Though, small businesses aren’t profitable every month, let alone every year, your strategy as a business owner speaks for the growth of your business. A starter can have it a bit eventful, anyway.

Since the cash flow is the oxygen of all businesses, you need to run this exercise on a fixed regular basis e.g, weekly, monthly or annually, depending on your growing interest in the business.

6. Outline your forward-looking business budget

Whether you’re a beginner or you’ve been doing this a while, projecting what will happen to your business in the future is educated guesswork. Supposing you’ve been in business for a while, that’ll certainly help the accuracy of those guesses (as you might, well, guess). A starter with business orientation can as well be in form here.

With your profit and loss statement, you have been equipped with an historical document that reveals the past of your business. Upcoming is to bring your budget to life. Mind you, this is a forward-thinking and future-focused document.

For this step, your profit and loss document will serve as a reference that guides your understanding of the seasonal ups and downs of your business. Hence, you note which investments in your business are worth repeating, what needs adjustment, and what you should avoid completely in the future.

Also, You might leverage the favourable information and decide to hire more staff and extend your hours during certain times of the year, making your business even more profitable in the months that demand is highest.

Conclusion

Once you’re able to track, plan and excellently prepare your small business budget, chances are you’ll effortlessly grow that business into a conglomerate.

As a business owner, you should first, understand that you need support to grow your business. Secondly, you need continuous knowledge as it is the best way to equip you for potential success.

Follow these social media accounts to update yourself with essential business knowledge.

Facebook, Twitter, Instagram and LinkedIn.

Why Separating Business and Personal Finances is Good for Business

As a business owner, it is important you don’t take your finances lightly. Most business owners make the mistake of mixing up their business and personal finances thereby unable to differentiate their business and personal expenditures.

A study by the U.S Bank as highlighted by the Hartford Small Biz Ahead stated that 82% of businesses fail due to cash flow mismanagement.

If you’re the type that combines your business and personal cash flow, your business is fast heading to early bankruptcy. To save your business from this doom, the best approach is to separate your finances.

In this article, I will share the reasons why separating your business and personal finances is good for your business.

But first, let’s dig from the basics.

What Is The Difference Between Business Finance And Personal Finance?

Business finance is the fund you used in the strategic and operational running of your business. It’s the amount you’re raising and managing in the areas of planning, control operations, and your financial structure while personal finance covers managing your money, savings and investment. It also comprises your budgeting, banking, insurance, etc.

That said, it is also important you consider your business as an entity that is capable of surviving on its own. In a way that it has, its own accounts, investment, budgeting, etc.

Excerpt: Understanding Financial Literacy with Money Africa

Why You Should Separate Your Business and Personal Finances

Separating your business and personal finances is important in many ways, here are 7 of them;

1. It helps save time and money

It is important you let your business account to sort your business expenditures and your personal account does the same.

This will help you to better track your business expenses and help you or your accountant to record your cash flow in an organized form. This act is necessary for accessible fund analysis and management.

When you have your accounts all organized, you’ll save time and money for sorting your finances, and when your business grows to the stage that you hire an accountant, the job will be less stressful for him.

Saving time and money will mean that you are able to invest your energy in other business-productive activities.

2. It helps achieve financial stability

Having a business comes with its own risk. You can’t be sure about when you’ll attain the break-even point despite investing diligent works. You only keep your hopes high while being consistent with the process.

So when your business downtime hits, separating your business and personal finances will help you spot the tsunami and immediately adjust your expenditures. This difference will guide you whether to reinforce your business with your personal finances or let the business help itself.

And when you seek funding or financial support, only a business account can stand in for you, else every investor will believe you’re using the money for something else.

3. It makes auditing easy

Every government utilizes business audits to evaluate the viability of a business and its likely economic benefits. They do this because it is important to ascertain that the business complies with the standard of doing business in the state.

If your business and personal accounts are jumbled together, your business expenses will be difficult to scan through. And that will create a wrong perception of you as a business owner.

However, when you have your finances as well as supporting documents are intact, your auditing process becomes easier and your tax returns and financial reports are well examined.

4. It reduces your business tax rate

Having clean and easy-to-understand financial records could help you reduce your tax rate. This is possible because your auditing process will be simpler and the auditor will be able to spot your financial model.

That way, your business won’t mistakenly pay for what your personal maintenance which may include rents, transportations, and other business expenses.

5. Ease the borrowing process of business credit

Many businesses survive on loans and credits. They access these when they need to execute a project or want to stay afloat during hard times.

But obtaining business credit isn’t child’s play. Your financials must be solid and well-articulated, if not, the bank will disregard your proposal.

The agency or bank needs to be sure that your business can survive without your money. So having a separate account makes it easier for the agencies to give you loans. They can easily visualize your business sustainability and how you’ve managed money in the past years.

That trust currency will enable you to access the actual capital to grow your business.

6. It enhances your professional identity

Customers and investors do not want to conduct business with companies that are treated as hobbies. They want to work with you when you take your business seriously. They want to see how professional you are and they want a clear belief that you and your business operate as different entities.

If you don’t have separate accounts for your business and personal expenses, it will tell on your business. The investors will see the business as mainly a play, and they won’t toy their money with it.

Besides establishing your professional identity, it positions your business as a respected entity that clients and investors can work and associate with.

7. It prevents your business from bankruptcy

Ultimately, separating your business and personal finances prevents your business from bankruptcy. You will enjoy the ease of accessing funds, and business support.

Aside from that, it also guides the way you dip your hands into the business account. This is true because you’ll clearly identify when you’re crossing the business-personal account line. And save you from likely debt.

Conclusion

Now that you understand the importance of separating business and personal accounts, you should test your financial literacy, and have a good way to earn legal protection.

Even your employees will respect the money flow, as all money transfers will be made according to specific protocols, including salary, dividends, and other distributions, rather than in an arbitrary fashion.

The Enugu SME Agency has created some videos on financial literacy for business owners that you can access here and here.

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