Financial Management Best Practices for Running a Small Business

27 Oct
running a small business

The concept of financial management can be a perplexing and unappealing topic of discussion for many small business owners. Most see themselves in charge of leading sales, managing employees and developing new products—all important functions of running a successful business. However, according to the Small Business Administration (SBA) Office of Advocacy, only about two-thirds of businesses survive at least two years and about half continue past five years in operation. These problems typically stem from poor financial management.

Business financials tell a story. Without sound financial management, there is no story to tell.

Sound financial management is one of the single biggest factors in ensuring the health and longevity of your business. Having quality financial information at your fingertips gives you the tools you need to price your services, plan for inventory and decide what you need in terms of operating expenses.

Your business financial reports let you know if you are making a profit, if you require financing, and how much financing (e.g. loans) you can afford when needed. Overall, running a small business with sound financial management helps ensure you are working toward a long-term, viable business. And, importantly, it also helps you identify a failing or struggling business.

In Excelsior Growth Fund’s guidebook The Business Owner’s Guide to Small Business Financial Management, you will learn about the components of a financial management system to create a solid foundation for your business. The guidebook includes information on bookkeeping, financial reporting, strategy and best practices for maintaining an organized and accurate financial management system.

Ready to learn more? Download The Business Owner’s Guide to Small Business Financial Management below and start building a strong financial foundation for your business.