7 Best Banking Practices That Will Help Your Business Survive Its First Year

If you want to start your own business, you want to stay in operation for many years. But launching and running a successful business is easier said than done. Plenty of first-time entrepreneurs are not aware of the crucial beginner business tips; thus, they end up failing.

In this post, you can learn how to launch a business that can surely survive its first year and the many years to come.

1. Separate Your Business Finance from Your Personal Account

Separating your business finances from your personal account is an imperative way to prove that you are running a business and not a hobby. This will help protect your personal assets in case of legal disputes.

Setting up a business bank account will make it a lot easier for you to keep your business expenses separate whilst keeping a record of such. If you wish to get a corporate credit card and supplement with your personal money, you can add them to your business account regularly and justify it as owner’s equity.

2. Create a Solid Business Plan

If you are not looking for a bank loan or an investor, it is tempting to skip creating a business plan. But having a business plan is an excellent way of honing your vision.

You do not have to create a 100-page document, but the plan must be detailed enough to show your potential bank or investor that you have a good business model and solid target market.

3. Acquire Sufficient Financing

Your business cannot operate if you don’t have enough money. So before getting started, make sure that you have enough money to purchase or manufacture inventory. You’ll also need enough funds for promoting your business or rent out a commercial space.

If you lack startup capital, you can talk to your bank for help. They can offer you several working capital solutions like guarantees, receivable finance, and import and export finance solutions, especially if you want to engage in international trade.

Other possible financing sources include personal loans for business use or a cash back credit card.

4. Practice Sensible Financial Management

Money is a limited resource so you must spend your business money wisely. Since you might not be able to hire a competent accountant at the beginning, consider using reliable accounting software.

 

Track each penny that flows in and out of your enterprise.

 

Remember that most start-up businesses fail because they run out of money. Therefore, you should always keep your costs as low as you possibly can until you have built your best products and your sales began coming in.

Also, you must only hire people you need and use freelancers and contractors for the rest. If you do not need a space, consider foregoing an office. Generally, you should only spend on things your business needs, and not on those you think it should have.

5. Make it a Habit to Measure and Adapt Accordingly

Your resources are tight if you are starting your business so it makes sense for you to make sure that your time and money are spent in the right place. Do not assume that you know what is going in your business; rather, you need to back everything up with facts and numbers.

Analytics and charts may easily overwhelm you but you need to have at least two key metrics for your business that you monitor at all times. For instance, know where the site traffic is coming from and what your growth profit percentage per project or product is.

6. Keep All Contracts Legal

Keeping contracts legal is one of the neglected tips for beginners. Yet, this will help protect your business from future claims and malicious lawsuits.

When conducting business, you need to enter into an agreement with service providers and suppliers. Though nothing is wrong with entering into a gentleman’s agreement, this is not always a smart thing to do. Such arrangements can easily be broken – and when this happens, seeking compensation in the court of law will definitely become a challenging task.

Ensuring that all the contracts you have entered into are legal is an excellent way of protecting your business from any legal risk. You can work with a business lawyer whom you contact if you need to.

7. Put in Hard Work

For your business to survive its first year, you will need to put in long hours. When your business closes for the day, do not rush to go home. Instead, stay behind closed doors and compile a sales report for the day.

Ensure that you check digital channels to stay informed about what your customers are saying about your business.

Anyone can launch a business but not all can hack it. If you are a newbie, you must take every step to make sure that your business establishes on a solid footing. By implementing these business practices, you can be in a better position to start a business that will grow and live beyond a year.

News Reporter