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6 Financial Stability Resolutions for Your Small Business in 2021

The end of one year and the beginning of the next should always prompt small business owners to think about their business resolutions for the coming year. This is true for 2021 more than any other recent year, after enduring what 2020 brought. These six resolutions not only apply to most small businesses for the coming year but are useful for years to come.

Resolve to Stabilize Your Finances

  1. Build Your Cash Flow -  If we’ve learned anything this year, it is the value of having a continuous cash flow. When businesses had to close temporarily or do a sharp pivot with no warning, companies without good cash flow felt the pain early on. Some companies that couldn’t maintain cash flow went out of business. There are many ways to build cash flow depending on your industry: subscription sales, requiring cash paid at the time of purchase, providing quicker deliveries, using early payment discounts for vendors, cutting costs, rewarding prompt payments, and requiring deposits on orders from clients are some suggestions.
  2. Lean budgeting -  Go over your monthly and weekly budgets to make sure you have cut out any unnecessary spending. Account for every dollar you know is coming in ahead of time. 
  3. Pay off debt - Credit cards and high-interest loans are not good debt and should be avoided, to begin with. Using a credit card might be helpful as long as it is paid off at the end of every month; however, many businesses carry a monthly balance without paying them off before using them again. Not only does that add up in interest, but it ties up your cash and looks like debt if you apply for low-cost loans.
  4. Flexible financing – Instead of using the credit card for everything, open a line of credit at your bank or financial institution. You only pay interest when you use it, and pay it off as soon as you can. It gives you better cash flow at much better rates.
  5. Invest in your business – Budget for software or training for staff. Invest in tools or technologies that create more value and productivity and allow for future growth. Get a good accounting program such as QuickBooks. Hire someone to handle your social media, work with new marketing campaigns, and expand your customer targeting. Long-term investment could include developing new services or products.
  6. Implement a Tax Planning Strategy to Build Wealth - This resolution may be the most crucial step you can take for long-term financial success. Strategic tax planning is the key to building wealth. With tax-efficient strategies in place all year long, savings become assets for investment. 

Sound Financial Assistance When You Need It 

You don’t have to face the uncertainty of 2021 alone. Myrick CPA is here to help you plan your budgets, review business costs, guide you through dealing with liability issues, and help you implement the wealth-building strategies that define successful business owners. We know you have questions, and we have the answers. Contact us today.