By Helen Wade
Financial literacy is essential to run any business. Whether it is your single-person startup, a partnership, a corporation, or even a nonprofit organization, you need to manage the cash flow.
The author of this post is a professional editor from Essay-editor.net, which provides academic editing services online, including college essay editing services; Helen often gets orders to edit papers on economics and investment. For this post, she has gathered universal financial advice.
The crisis caused by the pandemic has influenced private companies significantly. Firstly, it deals with the restaurant, travel, fashion, and beauty industries. However, everyone has been touched by global economic changes. Today, more than ever, businesses need constructive recommendations on financial issues.
#1 Make a financial plan
Take into account your incomes and expenses and make a well-considered long-term and short-term plan. Calculate possible parameters for one year, quarter, month, and even one week. By analyzing financial resources, you set borders for your business activity and minimize the cash-flow gap. It is a good way to save money.
#2 Optimize internal business processes
Consider the effectiveness of your business operations. It is not only about minimizing costs. Choose your price strategy and adjust your business model to it. For instance, your premium price strategy must meet high-quality standards and client-oriented service.
Every process in your company has its cost. Pay attention to their contribution to income. It happens that some operations are superfluous. You spend unnecessary costs (salary, materials) for them, and get little in return.
A well-organized work is a must for a stable financial situation. The chaotic distribution of duties can lead to duplicating functions and unjustified expenses on their covering.
#3 Control the cash flow
Hire a good accountant, even if you have a small business. Thus, you can get all the necessary data on your expenses and incomes. With this information, you can react to the situation quickly. Moreover, it is a good background for further analysis.
#4 Income growth must be higher than the increase of costs
Do not spend more than you earn. This simple rule is the basis of financial success for individuals and businesses. Specialists from Essay-editor.net recommend putting some money aside. For instance, if your annual increase in revenue is 10%, the optimal increase of costs has to be up to 7,5%.
Thus, you are always ready for force majeure. The financial cushion is essential to cope with unforeseen situations: a new law, customer’s debts, pandemic restrictions, etc.
#5 Rent equipment
Today one can rent a lot of things, starting from a coffee machine to serious industry equipment. Instead of buying something, think about renting or leasing it. So, you save money and get an opportunity to return rented items if business is bad.
#6 Look for competent employees
As a rule, professional specialists get high salaries. If you had employees on your payroll through the pandemic, you might be eligible for a tax credit called the Employee Retention Tax Credit (ERTC), which was part of the CARES Act relief package as an extra incentive for smaller businesses to retain their employees.
Meantime, their intellectual and creative skills bring awesome ideas and effective solutions to your business. Besides, one expert can replace two average employees. He/she will fulfill assignments in the shortest terms, and the results are always top-notch.
#7 Invest in progressive technologies
Modern software, channels of distribution, online payment opportunities, such as with cryptocurrencies – which you can learn more about here – and automation systems all boost the development of business. They minimize the cost of production over time and move the company forward. Innovations contribute to the intellectual capital that can be converted into new goods and services claimed by customers.
#8 Communicate with your partners
Cash flow gaps are a risk for businesses. For instance, if you lack cash this month, negotiate this issue with your suppliers and lessors. Try to discuss the payments rescheduling. Having postponed payments, you can gain time and avoid cash flow gaps.
#9 Determine the priorities of your expenses
Apart from a usual plan, you need a plan B. This document helps you to respond rapidly to changes in the business environment. Divide all your expenses into three categories: A — essential, B — secondary importance, C — additional. Analyze job positions in your company, as well as rent, delivery, insurance, office, advertising costs, etc. If your business faces a financial crisis, reduce your costs starting from category C.
If you want to be well-informed about the latest events in the financial sphere, read economics articles and official reviews. They are quite helpful, as you can learn about new financial software, tax changes, business strategies, etc. And if you are a student who has to come up with an academic paper on Finance, check out these tips.
How to write a Finance paper: Pieces of advice from experts
Editors from Essay-editor.net are well-versed in Economics and related fields. They have already checked hundreds of essays and research papers in these disciplines. So, their recommendations are sensible and effective.
✓ Adhere to standards of academic writing
The research paper is a serious assignment. Thus, you have to meet specific requirements:
- write a well-structured and informative text,
- base your conclusions on the in-depth analyses,
- give a constructive answer to an actual financial issue,
- share fresh, well-grounded ideas about the topic,
- choose a formal style,
- cite sources according to the specific format (MLA, APA, Chicago, etc.)
The value of your Finance research paper is in its practical use for the scientific and business world. Your goal is to transform the theoretical knowledge into useful practical recommendations. So, strive to come up with worthwhile findings.
✓ Revise your text
It might seem challenging to edit a research paper on Finance. Apart from grammar proofreading, one needs to check calculations too. Besides, even if English is your native language, you can misuse economic terms. Professionals providing online academic editing services can review and correct your text in the shortest terms.
Summing up, the financial sphere is worth studying. Students, entrepreneurs, and all progressive people have to learn, at least, the basic rules of money management. It is a crucial condition for achieving personal and business success.
BIO
About the author
Helen Wade is a Business Consultant and an editor for Essay-editor.net, the owner of a small handmade business, and a freelance blog contributor. She strives to find a balance between money and life, successfully combining a professional career and creative projects. In her posts, Helen shares experience-based reflections on economic and financial issues, trying to turn complicated theory into simple, practical advice.
