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How to Manage Your Small Business’s Finances Successfully


How to Manage Your Small Business’s Finances Successfully

A lot goes into running a successful business. You need a strong team, a good product or service, marketing that reaches the right target, and more. But a part of business success that often gets underrated is the importance of managing your finances. 

Improperly managing your finances can often spell the end of your business, and ultimately lead to failure. You need to have a financial plan and strategy, always be aware of how much you are bringing in, and ensure you are always prepared for tax time.

With that in mind, this guide is going to go over a few good tips to help you successfully manage the finances of your small business and stay on track.

Build Your Business Credit Score

First and foremost, you should make an effort to build up your business credit score. If your credit isn’t in a good place, it can make borrowing money more difficult and a bad credit score can often show vendors, lenders, or suppliers that your business carries a lot of risk.

You can build up your business credit score by using credit responsibly, keeping your utilization low, and making sure you always make payments on time. You won’t get great credit overnight, but with enough time and some dedication, you can certainly improve your score as a business.

Even if a bad business credit score doesn’t disqualify you from borrowing money, it will be more expensive due to a higher interest rate. Also, if you have collections or other negative marks on your credit report, it is a good idea to deal with them. Getting these removed can improve your chances of getting approved for credit and loans.

Make sure to check out your business credit report often, to ensure there are no mistakes or other issues that are negatively impacting your score.

Use Software and Technology When Possible

Trying to manage all of your finances manually can often be a disaster waiting to happen. Not only can things be misplaced, but mistakes can be made incredibly easily. It also takes a lot more work and effort to record every transaction or keep track of payments with paper and pen.

Instead, consider using technology when you can. This includes pieces of accounting software, tools to automate invoices, software to track sales and/or inventory, and more. It can make your financial management much simpler, quicker, and more effective. Sure, getting used to new software and methods of doing things may be difficult, but once you get a hang of it, it will save you a ton of time, effort, and money.

There are many options out there, and many of them are affordable enough for businesses of all shapes and sizes to try out. Make sure to do your research on the different options, and consider trying them out to see which works the best for your needs.

Monitor Your Spending and Create a Budget

Another important part of managing your finances is monitoring your spending to ensure you aren’t going overboard and putting your company at risk. Perhaps the best way to monitor your spending as a business is to create a budget. A budget will show you exactly how much you are spending every month, so there are no shocks or surprises.

Not only does it help you see how much you are spending, but also where that money is going. This can help you identify areas where you are spending too much. In addition to watching your spending, a budget can also be helpful to track cash flow and see how much revenue you are bringing in.

Of course, budget only works if you put in the effort to keep it current and updated, so make sure to stick with it. You can budget manually, but it is often better to use a piece of budgeting software to be able to enter and check things quickly, and from any device.

Keep a Cash Reserve

Another important thing to keep in mind is the importance of keeping a cash reserve. This is simply a little bit of extra cash that you keep around, just in case your business needs it for something.

An unforeseen issue popping up is common in business, and you need to be prepared. This could be a machine breaking down, your revenue slowing down, property taxes increasing, suppliers adjusting their prices, and more.

The amount you should keep varies, and can often depend on the costs associated with your business. The higher your costs, the more you should keep in reserve in case business slows down. If you don’t keep any extra in case of a business slowdown or unforeseen issues, your company could find itself in some trouble if you get unlucky.

This cash should be kept somewhere stable and secure, where it can be accessed quickly and easily if need be. For example, you wouldn’t want to keep this in a risky investment.

Don’t Be Afraid to Borrow

While keeping cash reserve is good, don’t be afraid to borrow money, either. Many businesses are hesitant to borrow, either for fear that things will get out of hand and they won’t be able to pay it back, or because they would simply rather spend money they actually have.

However, as long as you do it intelligently, getting a business loan can be a great way to reduce financial strain on your business. It can help you expand your operations, deal with surprising expenses that come out of nowhere, and generally scale up over time.

Of course, whenever you get a business loan make sure to take a close look at things like the terms, interest rate, and other rules. Also, ensure the lender you are working with is legitimate and trustworthy, too. If not, you could find yourself locked into a situation that hurts your business more than helps it.

In conclusion, we hope that this guide has been able to help you successfully manage the finances of your small business.

trading market

Modern Tendencies of Global Trading Market

The world is now a global village. Hence, globalization is a concept that has affected every aspect of human existence. The exchange of goods and services across nations and individuals, regardless of geographical limitations, is becoming increasingly seamless.

A Brief History of Global Trading Market

If you take a trip down memory lane, you’ll notice that global trading has come a long way. The origin of international or global trading dates back to the 19th century after the French war. The trade relations among nations increased significantly from 1865 to 1913, just before World War I broke out.

When WWI broke out, global trading fell rapidly. There was a massive dip in the export market. As it is with war, arms sales enjoyed enormous proliferation.

After World War I, things began to fall back to normal. It took a while for global trade volumes to rise to the peak reached before 1914.

The most significant rise in global trading came after World War II. In 1947, the General Agreement on Tariffs and Trade (GATT) was signed in Geneva by 23 nations. It marked a new dawn for global trading markets.

However, to better understand the modern tendencies in the global trading market, we need to look at the industrial revolutions that have happened over time. We can then link them to how they affect the global market in recent times.

Global Industrial Revolutions

There is an age-long relationship that exists between industrialization and globalization. The global industrial revolution that started in the late 18th century ushered in an abundance of raw materials. Industrialization led to the creation of new products and markets.

The products and raw materials that came, as a result of industrialization, needed to reach consumers across the world. That’s what led to the expansion of global trading markets.

Products were made in Europe from American raw materials and exported to Asia for consumption. A consequence of this affair between industrialization and globalization was the creation of trade routes. These trade routes connected America to Europe, Europe to Asia, and other continents of the world that needed the products.

We can talk about the early days of global trading markets without the pros and cons of globalization. The good that happened to the world was that manufacturers had more markets to sell their products. On the flip side, it created the opening for Europe to colonize the world.

The Journey from Then to Now

At this point, it’s safe to look deeper into how the industrial revolutions changed the course of global trading markets.

The First Industrial Revolution (1760 to 1830)

This is the period when Britain dominated and monopolized the global market. At the time, they had control of machinery, manufacturing techniques, and skilled laborers. Knowing that they were ahead of the world in industrialization, they kept everything within the confines of the British territory.

The embargo on the exportation of the industrialization that gave Britain a huge advantage didn’t sit well with some British businessmen. These folks began to seek more significant market opportunities outside Britain.

In 1807, two Englishmen took the industrial revolution to Belgium. The revolution further expanded global markets at the time.

Though it took a while for other countries to get on the wagon, it eventually happened after almost over a decade of British Monopoly. European countries like France and Germany came on board the ship to industrialization.

When the United States came into the picture, they gave the Britons a good run for their money’s worth. America became an industrial giant in the late 19th century.

Other countries that joined the industrial revolution at the time were Japan, the defunct Soviet Union, China, and India.

The Second Industrial Revolution (1870 to 1914)

While the first phase of industrialization focused on machinery and skilled labor, the next step introduced the manufacturing of more natural and synthetic products. It was in this era that synthetic materials like plastics began to flood the global market. Global trading expanded as a consequence.

The expansion in marketable products demanded a more straightforward way of doing business. Hence, this era brought computers into the fold. These computers now gave rise to what was called automatic factories.

With the global market expanding, governments began to get more involved. Economic policies came into play to establish checks and balances. Hence, averting an impending global financial and market crisis due to laissez-faire ideas that were at play at the time.

World War I marked the end of the second industrial revolution. Global markets were on shutdown as trade routes were either closed or manned by warring nations.

The Third Industrial Revolution (1990 to Present)

The advent of the internet marked the beginning of the third industrial revolution. The global market has shifted from the exchanges that took place at country borders to a peer to peer market setting.

With the world dealing with a myriad of global issues like natural disasters in, overpopulation, and poverty in some of the most populated cities of the world, there was the need to make the world a global village.

Trade deals can go on from anywhere in the world. People now have access to computers and the internet. It doesn’t matter if you’re a college drop out or a graduate from some of the best universities in the world, you can be a part of the global trading market.

In the first and second industrial revolutions, skilled labor was an exclusive reserve of a few countries that dominated industrialization. Today, remote workers can come from anywhere in the world, thanks to the advent of the internet.

For instance, you can hire labor remotely over the internet. An example is getting content writers from content review websites like Pick The WriterWriting Judge, and so on. The global market has now become more internet and remote-based.

However, the third industrial revolution has its significant cons. One of which is cybersecurity. With a lot of data shared over the internet, there are concerns about the unauthorized use of personal information for fraudulent activities.

With small businesses increasing, the dependence on the internet of things is increasing, thereby posing further cybersecurity challenges in the global trading market.

Statistics available shows that 43% of cyber attacks are targeted at small businesses. Sadly, over 60% of these small businesses go out of business within six months of the attack.

What’s The Way Forward?

As we gradually move from the third into the fourth industrial revolution, we expect that some of these cybersecurity challenges will reduce. Each industrial era comes with its pros and cons. However, the higher we go, the better we get – and the global trading market isn’t left out.

Already, technological advancements like Artificial Intelligence (AI), are with us. We are getting ready for an industrial revolution that will completely alter the way we live and do business. Industries are shaping up for what is coming with this technological revolution.

One sure thing is that the global economy will improve and life will be better for many people all over the world. Most bottlenecks in living standards and business opportunities will disappear to a large extent.

We envisage an era where technology will make life a lot easier. Trading platforms like crypto will make massive inroads into the global market systems. It’s a progressive world, and all we can do is get ready for the imminent.


Anna is a specialist in different types of writing. She graduated from the Interpreters Department, but creative writing became her favorite type of work. Now she improves her skills while working as a freelance writer for Pick The Writer, Writing Judge to assist a lot of students all over the world and has free time for another work, as well. Always she does her best in the posts and articles.