Top Money Management Tips For Your New SME

by CXOtoday News Desk    Jun 28, 2017

investment

Starting a new SME? Good for you. Entrepreneurs such as you are the backbone of the economy and you should rightly be excited by the opportunities that await. But, it’s time to get real. About one in five businesses survive their first year, half then don’t last five years and a third make it past their tenth anniversary. The market is an unforgiving place and you need to make sure your SME sits within the survivors.

The key to success? As ex Bill Clinton aide James Carville might say it’s ‘the economy, stupid’. Stay on top of your finances and you’ll be in control of your business’ destiny. And, how do you do that?

Here are some top money management tips to deploy in your new SME:

Staffing costs 

Labor is one of the biggest costs faced by any business so it’s vital not to let this spiral out of control. It’s so easy to get a rush of blood to the head if you start doing well and decide to take on lots of staff (and spend lots on equipment). However, this is when you can become stretched. Consider taking on younger, fresher employees who you can train and develop within your company, rather than shopping around for the expensive and experienced ‘finished article’. Be cautious about numbers too. Add people one at a time so that you can ensure you’re recruiting the right people to fit into your company’s ethos – SMEs cannot afford to carry anyone, from either a financial or productivity perspective. It’s crucial to build a team around you – and getting the right people at the right pace is a balancing act you must perform.

Project management

Every project your business takes on has to be managed properly. Without effective project management you could easily lose track of the progress you’re making towards your targets and could very quickly lose a lot of time and money. At the outset you need to establish exactly what you aim to do and how you plan to measure success and progress so that you can identify and fix any issues before they balloon into a crisis. Your aim should be to strike the perfect balance between the three pillars of cost, time and quality so that you deliver the right result for all concerned. Completing projects within time and budget will save you costs in the short term and should help to ensure you get more business in the future too. 

Let the software take the strain

Don’t want to get buried beneath piles and piles of paperwork? Then it’s time to think about software. Accounting software can ensure your accounts are handled in an efficient way without letting them eat up too much of your time – and can be accessed at any time so that you can make informed spending decisions based on a real-time assessment of your finances. Cost effective software packages can even help you to sort tax forms, deposit slips and voucher checks too.

Get the right software, introduce robust project management procedures and make the right staffing decisions and you’ll be well-placed to become one of the economy’s success stories rather than another victim of the cut and thrust world of business.