For small and medium business owners, the allocation of funds according to the needs and the right financial planning strategy is the key to surviving in the midst of intense business competition. Now, the main purpose of your business is not to get as much profit as possible, but also how to manage income so that it can be set aside for business development capital.
Even though your business is currently booming, you must remain vigilant to deal with unexpected events such as decreasing sales numbers, and increasing prices of raw material products. So, how to set aside money from the business results right? Consider the following five tips.
1. Limit New Inventory Purchases
When a business experiences a surplus, many businesses are tempted to buy business inventory that is not really needed. The latest devices and electronic items can be the most confiscating your business funds, especially if you are running an online-based business. Every time you buy a new device and electronic device, the net income of your business also decreases in significant amounts. It’s a good idea to maximize the functions of your device and other electronic devices as well as possible, rather than having to follow trends without considering the financial condition of your business.
2. Consistent Cutting of Percent of Profit as a Reserve Fund
Try to set aside at least 20 percent of the total amount of net income generated. This strategy can provide a big change for the business in the long term. The existence of a reserve fund can help overcome the crisis in companies that often come suddenly. Thanks to a reserve fund, you can at least minimize the risk of losing profits and resources without having to sacrifice business existence.
3. Create a special account for business savings
Having a special container to raise reserve funds is something that is absolutely necessary for the company. You can open a business savings account to separate reserve funds from other operational costs. Or, you can invest the reserve fund in an instrument that has a high resale rate, one of which is gold.
If you already have gold in a certain range or weight, you can practice consignment. One who provides consignment services is Pawnshop through the Gold Consignment product. Here, the investment scheme is that you use the gold you have to produce something by selling it. The gold that you leave will be sold Pawnshop to customers who come to buy precious metals at the Pawnshop outlet, then Pawnshop will order replacement gold with the same level and weight along with the profits from the sale and purchase. Your gold remains intact, profits are obtained.
4. Maximizing Fund Efficiency
How to set aside money from the most effective business results can be done by saving the company’s operational funds. Efficiency is not always synonymous with cutting operational costs. Instead, this strategy aims to find opportunities to get more profit with the least expenditure. In addition, you also need to track the amount of business expenses every week.
Ideally, evaluation of expenditure and income is carried out every month. However, evaluations carried out every week can actually have an effect on giving your business expenditure patterns. From the expenditure data, you can see that even the smallest expenditure can increase over time. Later, you can determine which posts require funding efficiency.
5. Set Company Targets
Even though your business is engaged in small and medium-sized businesses, you need to have a target and broad market reach. Set a long-term business plan and achievement targets for your business’s reserve fund for a predetermined period of time. If your business already has public trust and a broad market reach, you can target other, far bigger targets.
Those are some ways to set aside money from business results that you can implement in running a business. May be useful!