As a sole trader, keeping an eye on your finances can sometimes prove tricky – particularly when you’re already snowed under with the day-to-day running of your business.
Whether it’s juggling commitments to customers, promoting your company or restocking and purchasing materials, it’s a fact that sometimes general administrative duties can get in the way of monitoring your money. In this guide, we’re going to take a look at some handy tips successful sole traders use in order to keep their finances on the right track.
Keep costs down where you can
This can be tricky dependent on your particular business model, although as a general rule there are a number of ways in which you can keep your overheads low.
For example: do you need a plush office space, or can you work comfortably out of a spare room or basement in your home? Trade professionals such as heating engineers, decorators and electricians may find that a home office is preferable than renting out an expensive commercial building, whereas retailers might find a rented space indispensible. If working from home isn’t an option, consider an office share with another sole trader or small-to-medium sized business.
It might not be wise to scrimp on equipment, but try to keep an eye out for special offers on tools, computers and other office staples. Flash sales (such as Black Friday) are great times to make a purchase.
Give some thought to credit control
In a perfect world, customers would pay on time, every time. The reality – as we all know – is often wildly different. Although it can be difficult to predict when a customer is fraudulent or has little intention to pay, there are steps you can take to better inform yourself. Consider checking business-to-business customers on Companies House before agreeing terms, or use a credit check agency to ensure your customer is good for it on larger jobs and transactions.
Be clever with your marketing
Do you need to advertise your business in a local newspaper, or could you save money by growing organically online? Utilise social media in order to spread the word – it can be just as effective as paid advertising and the only cost is your time. Or course, we’re not suggesting you eschew traditional methods altogether – just ensure you’re evenly spread across all platforms in order to reach the largest possible audience.
Fools rush in
If your business is a new venture, it can be tempting to try and grow as quickly as possible. Be wary, as you might find yourself biting off more than you can chew, resulting in missed orders or losing track of unpaid invoices. Take your time.
Price your goods and services strategically
Are your services in greater demand at a particular time of year? Don’t be afraid to raise your prices in order to capitalise on this. Likewise, in times where business is slow you should consider offering special deals or discounted “off-peak” rates. Operating with lower overheads often yields more positive results in terms of cash-flow, which ultimately helps to keep you and your business out of debt, if you are currently struggling with debt and live in Scotland then you might want to consider these guys: trustdeedscotland.net.
