One of the first big hurdles small businesses face is acquiring a loan. Easy business loans can be hard to attain, and achieving this milestone propels the possibility of further accomplishments. As you celebrate this achieving in your business, it is smart to understand what you should do now that your company has the finances it needs. Keep in mind some of the traits and qualities you exhibited in getting the loan, such as:
- Learning from your mistakes. We all make them, but making the same mistake multiple times can catapult your business into the bankruptcy office faster than it took to acquire your loan.
- Always have extra funds set aside – especially in the first year. It will take some time for your business to be as profitable as you think it will. Allocate additional money for the second half of the year to help you over the hump without having to ask for another loan.
- Accurately evaluate your expected income and expenses. Not much can more decisively kill your company than being unrealistic about your figures. Never overestimate your future income or underestimate your future expenses; try to do the opposite.
- Once you estimate these figures, create a real budget with accurate references. Doing this work at the beginning will help prevent problems later on.
- Don’t stress about your finances.
Once you do the work, trust in your company and business model without examining the numbers every five minutes. Success takes time, and over analyzing your business performance can lead to making poor financial decisions.
Heeding all of this advice helped you attain your loan, so remember it as you open your business and the first year gets underway. Now that you have your money, there are a few more things you want to pay attention to, including:
- Use automatic bill-pay to keep from missing a payment. Missing a payment should be altogether avoided. The negative ramifications will impact your credit score and hinder your ability to obtain more financing later on. Poor credit for a small business loan can be hard to overcome. Automatic payments eliminate the possibility of user error.
- Set up separate accounts. Keeping your initial loan money aside from what your company brings in can give you a more accurate idea of the finances you have to work with. Try to run the business solely off of what it produces. In doing so, you can see necessary adjustments you will want to make to improve the performance of your business. Being forced to take the time to transfer funds between accounts also gives you pause to consider the decision you are making.
- Evaluate and adjust your company as necessary. When you think nothing bad will happen, it inevitably will. Be aware and ready for the complications that always arise. If you are not, you will need another business loan fast and might not be able to acquire one before it is too late.
- Do not become apathetic towards your finances.
Though keeping to close an eye on your money can cause issues, forgetting about your financial situation can have worse consequences. Find a middle ground by scheduling access to data on the money that is flowing through your business. A weekly, monthly, and quarterly evaluation should be adequate in keeping you aware of your finances.
- Just because you have the money does not mean you should spend it. An easy rabbit hole to go down is spending $50 here or $100 there on items that you had not initially budgeted for. Though these small expenditures might seem harmless to begin with, over time they can keep you from investing in profitable parts of your business. Self-control over this type of spending will pay long-term dividends. If you think there is something you need to buy for your business, factor it in the next time you calculate your expenses and see if you can afford it.
- Recognize that you have a loan. Remember that you borrowed this money. Your lender will not forget that you did. Be sure to keep an open relationship with your lender. They want you to succeed as much as anyone, and they can be the first to help you if your business experiences a difficult time.