What are the Basics of Small Business Finance?

What are the Basics of Small Business Finance?
  • Opening Intro -

    I have not attended any Finance or Economics class! What do I need to know about Small Business Finance?

    No, you don't need to be an economics or Finance major, but you do need to understand the basics of small business finance and good financial management.


If you are proficient with business administration, economics or finance skills, great! You have a big head start.

Do you need a bunch of spreadsheets? Not today, but as you plan your business, and it begins to grow, you’ll know how to use these! When you’re starting out, there are some basics areas where you need to learn as much as you can.

1. Bookkeeping

In very simple terms you need to keep track of the money that comes in and the money that goes out. It may sound like a simple thing, and it might be in the beginning, but you’re not starting this business to run for a month. Hopefully, you’re starting this business to last for a long time.

It’s a very good idea to put a smart small business finance accounting system into place from the beginning and get it set up to grow with your business. You will find a resource page below with some basic accounting systems that are affordable and easy to use for small business finance.

2. Purchasing

You will need to buy things for your business. In the beginning, it’s important to focus on how you pay for these items. If you’re using your credit card, no problem, but watch the finance charges. Try and keep the outstanding balance on your card down to a minimum.

If you are making most of your purchases online, then find a good payment tool or gateway that you can use to pay for purchases while at the same time collecting money from your customers

3. Credit and Collections

You need to make sure you get paid for your product or service. How this happens can vary greatly based on the type of business you run. If you’re just starting out, you will probably not offer your customers credit terms, more likely it will be cash on delivery.

For this, you need a payment tool that your customers trust and one that will allow you immediate access to your money. There are many online payment tools and gateways, like PayPal.

One important note, it is a very smart idea to use a payment tool or gateway that also offers you the ability to download transaction details into your accounting package. This saves you loads of time manually entering information into your small business finance software package and has many additional upside advantages.

In conclusion, it is important to note that financial analysis is not a huge issue in the beginning, because if you’re like most new businesses, there will be very little to analyze. Get the Small Business Finance Basics right, and the rest will follow with much greater ease.

Ignore the basics, or do them wrong, and you’re asking for problems later on that will distract you from your primary function as a business owner which is finding and keeping customers!

SaleBestseller No. 1
SAP Financial Accounting (SAP FI) in SAP FICO: Business User Guide (SAP PRESS)
6 Reviews
Bestseller No. 2
Business Plan Pro Premier v 12
28 Reviews
Business Plan Pro Premier v 12
  • Leverage your data in Microsoft Excel - If you already have financial data in Excel, you can easily import it and link it to your forecast. Then, include these tables as part of your plan or behind the scenes for advanced financial analysis.
  • Plan your cash flow to match the real world - Run through "what-if" scenarios and test the key variables that affect your cash flow.
  • The answers you need - Over 9,000 industry profiles included so you have real numbers from real businesses like yours to guide your decisions
SaleBestseller No. 3
Pack of 500 Check Envelopes - Double Window Self-Seal Security Envelopes - Self-Adhesive Accounting Software Check Envelopes for Financial, Business and Personal Use, White - 8.75 x 3.6 inches
  • FULL SET: This pack of 500 double window security check envelopes are perfect for official, business, private, financial and professional purposes
  • DOUBLE WINDOW: Double window design allows for you to see both the return address and receiver address inside. Made to hold accounting software checks, financial statements, or confidential mail
  • SECURITY TINT: Prevent unauthorized reading of your mail thanks to the interior blue security tint

Last update on 2017-10-18 / Affiliate links / Images from Amazon Product Advertising API


end of post idea


Helpful article? Leave us a quick comment below.
And please give this article a rating and/or share it within your social networks.

Categories: Business Financing

Write a Comment

Your e-mail address will not be published.
Required fields are marked*

Time limit is exhausted. Please reload CAPTCHA.