Make wise financial decisions: Small business banking tips
Is your inner entrepreneur calling? Or do you already own a small business? The desire to build something from the ground up and be your own boss gets you up every morning. Unfortunately, small business owners encounter unique challenges that can feel overwhelming as they pave their path. Unlike larger enterprises, small business owners face a constant battle against limited resources, fluctuating cash flow, and the pressure of personal finances intertwined with the business’s fate. In this blog, we’ll cover a variety of small business banking tips to help you overcome these unique challenges.
White River Credit Union understands. After all, we started from a humble metal box on top of a filing cabinet. Today, WRCU dedicates itself to providing support and resources that help small business owners overcome these hurdles and achieve their goals. We offer access to capital, cash flow management tools, and financial guidance and support—enough chit-chat. Let’s dig into the specific hurdles small business owners encounter and strategies to navigate them successfully.
10 ways to achieve your financial business goals
Here are ten small business banking tips to bolster financial health and pave the way for sustainable growth:
- Create a detailed budget: Outline your expected income and expenses so you can track your progress, identify areas for cost-saving, and make informed financial decisions.
- Forecast your cash flow: Projecting your incoming and outgoing cash helps you anticipate potential shortfalls and plan accordingly.
- Set financial goals: Define both short-term and long-term financial goals, such as saving for emergencies, expanding your business, or achieving profitability.
- Implement sound financial management practices: Plan for the inevitable fluctuation of income streams and forecast your cash flow so you can continue paying bills, meeting payroll, and investing in growth opportunities.
- Maintain accurate bookkeeping: Use reliable accounting software or hire a bookkeeper to track your income, expenses, and financial transactions meticulously.
- Monitor key financial metrics: Regularly analyze your key metrics, like profit margins, debt-to-equity ratio, and inventory turnover. Routine analysis will give you insights into your financial health and identify areas for improvement.
- Control your expenses: Implement cost-saving measures, negotiate better deals with suppliers, and avoid unnecessary spending to optimize your financial resources.
- Explore diverse financing options: Research and compare loan options, consider alternative financing solutions like crowdfunding or angel investors, and explore government grants or small business programs.
- Maintain good creditworthiness: Pay your bills on time, manage debt responsibly, and build a strong credit history to improve the chances of success for future funding opportunities.
- Separate personal and business finances: Set clear boundaries between your personal and business finances to avoid intermingling, which can be a tax nightmare and could lead to inaccurate financial reporting. With WRCU, we have both business and personal accounts, so you can keep everything separate without working with multiple financial institutions.
Cashflow management: Tame the beast before it eats your profits
Let’s be real: cash flow is the lifeblood of small businesses. A profitable quarter can quickly turn sour if finances aren’t meticulously managed. It’s no surprise that 82% of small businesses fail due to cash flow problems, highlighting the need for support and guidance. WRCU understands these challenges and offers solutions to help small businesses stay afloat and thrive.
Life is unpredictable, and what looks to be profitable periods can become problematic if cash flow isn’t organized and well-managed. By implementing systems for tracking income and expenses, you’ll gain the foresight and flexibility to navigate unexpected situations and make informed financial decisions.
Luckily, there are several tools and resources to empower small businesses in cash flow management, such as:
- WRCU VISA credit cards provide a convenient and secure way to manage business expenses separate from personal finances.
- Online Banking and the White River CU Mobile App give you real-time financial visibility of your accounts and can automate repetitive tasks like bill payments. Just open your laptop or mobile device, log in, and bam! You’ll see a complete view of your accounts with us.
WRCU offers additional financial products tailored to specific small business needs:
- If your business involves driving services, Uber/Lyft Loans support drivers working on behalf of ride-sharing platforms. These loans provide flexible financing options for vehicle purchases, maintenance, and other business-related expenses.
- Sometimes, no matter how hard you work, business funds get tight. A Line of Credit acts as your safety net. When you need to bridge temporary cash flow gaps or cover unexpected expenses, a line of credit may be perfect for you.
- Use Signature Loans for various business purposes, such as equipment purchases, marketing campaigns, or working capital needs.
Small business banking: Make the most of your checking and savings accounts
Small business owners must have small business checking accounts and one or more savings accounts to manage all finances effectively. You’ll want to consider your business needs, what investments you want to save for, and what accounts will yield the best interest.
For checking and savings accounts, check out the monthly minimum balance required, the monthly service charges (if any), monthly checking and deposit limits, and whether a dividend is paid. These factors are key elements in your selection of accounts.
Small business checking account
Utilize WRCU’s Small Business Checking Account as your primary account for everyday business transactions, such as:
- Receiving payments
- Making payments
- Cyclical transactions such as subscriptions, marketing services, etc.
Business savings account
The Business Savings Account is perfect for saving money for future needs and goals. Use it for:
- Building an emergency fund
- Saving for future investments
- Earning interest
WRCU accounts to grow your business
Consider our Market Savings or Business Interest Checking accounts if you’re ready to start growing and expanding. Use them to:
- Build a financial cushion
- Increase the money in your account
- Earn dividends on your cash
Small business banking options: You dream, we make it happen
Small business owners can gain valuable guidance and support by partnering with White River Credit Union. WRCU will empower you to navigate the complexities of financial management so you can get out there and thrive. Let’s go!
To learn more about WRCU’s small business solutions and business loan options, please contact us at (360) 825-4833. You can also stop by our branch at 1499 Garrett Street, Enumclaw. We’re excited to be a part of your journey!
