5 Financial Resolutions for Small Businesses in 2021

2021 is just around the corner. The beginning of the New Year is the right time for a fresh start and new opportunities. As a small business owner, this is the perfect time to reflect on what you want to accomplish in your business and create a plan to make it happen. 

Due to the weird and tough time businesses faced in 2020, achieving your goals and continuing to growing your organization has become even more important. Whether it’s managing your cash flow, optimizing your budget, building your savings, improving brand awareness, and controlling business expenses, here are a few important financial resolutions you should make in 2021 to accomplish all your desired business goals. 

Review Your Past Performances

It’s vital to dwell on the past if you want to increase your business growth, boost team performance, and take your business to the next level. You need to understand how COVID-19 and other factors have impacted your small business in 2020 in terms of profit, productivity, marketing, customer experience, and more. 

Discover the biggest failures and achievements you’ve experienced in the past year. Also, figure out where you left behind and what you can do to improve. Reviewing your business’ past performance will help you understand your company’s better and ultimately achieve your business objectives in 2021.

Ask yourself the following questions when reviewing your business’ past performance.

  • Did your business decline or grow?
  • How much the revenue and profit changed compared with the last year.
  • How much your business’ sales increased or decreased in 2020?
  • How much your business’ cash inflow and outflow in 2020?
  • Have you accomplished all your business’ goals in 2020?

Adopt- Financial Technology 

Fintech has reshaped the financial service industry in the past few years and made it possible to use a variety of technologies in your small business. From cloud-based accounting software to risk management tool, online funding marketplace funding, mobile payments, and innovative cash flow forecasting, several financial technologies are nowadays helping small business owners to create invoices, order raw materials, pay bills automatically, forecast cash flow, and more. 

Leveraging the benefits of these state-of-the-art technologies must be in your New Year resolutions list as it can help you streamline business processes, save time, and boost productivity. Here are some financial technologies that you should think of adopting in your small business in 2021.

  • Budgeting tools
  • Risk management software
  • Cash flow forecasting and management software
  • Payroll management software
  • Invoicing software
  • Financial analytics dashboard
  • Inventory management
  • Income and expense tracking tools

Optimize Your Monthly Budget

Once your small business starts to grow, it’s important to set a budget and track cash outflows each month. It will not only help you see your finances but also improve your cash flow and help you identify areas where you could potentially save some money.

So, how you can create a successful budget that’ll help you control your finances, understand cash flow, and optimize your savings. Here are some of the important tips to take your budget to the next level.

  • Use budgeting software
  • Stick to a budget
  • Have relatively specific saving goals in mind
  • Consider using cash for purchases
  • Avoid unnecessary expenses
  • Analyze your data monthly
  • Set aside money for entertainment and leisure
  • Review the business periodically
  • Shop around new suppliers

Invest For Business Growth

To bring out the best in your small business in 2021, you must invest in your company. Creating high-quality products and providing superior customer services are wonderful, however, investing in your business is vital to take your business to its next development phase. So, if you’ve invested in your small business in 2020, then 2021 is the right time to do the same.

Wondering which investment option will be right for your small business, here are the best investments in 2021 for the long-term growth of your company.

  • Certificates of deposit
  • Movement bond funds
  • Money Market Accounts
  • Forex Trading
  • Rental Housing
  • Treasury Securities
  • Money market funds
  • Growth stocks and funds
  • Municipal bond funds
  • Short term corporate bond funds

Keep an Eye on Your Cash Flow

Last but not least – keeping an eye on your cash flow could be another great resolution for your small business in 2021. If you want to get the real picture of your business’ money, reviewing your cash flow becomes important. Also, it shows how much money is coming in and going out of your business and how much working capital you have to keep your business afloat in the coming months.

You can use cash flow forecasting and management software to analyze your business cash flow. These innovative apps will help you view, plan, and solve cash flow gaps in real-time. Also, it can help you estimate the money your business expects to flow in and out, see what your future cash position would look like, and make better financial decisions.

So follow these above New Year resolutions to grow your business and become an intelligent small business owner. Think about what you want to achieve in 2021 and the future and set resolutions that can help you bring out the best of your financial resources.

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