by George Rodriguez
Staff Writer

1. Start your business on the right foot. You will be more prepared to handle the financial swings of a new business if you are adequately prepared for it. You cannot start a business thinking that money will immediately flow into your bank account. Some businesses generate revenues as soon as a month, but some could take up to a year before you can see some form of financial returns. Before you quit your day job, you must have saved up enough money to last you and your family at least six months to a year. Part of the financial preparations you should make is to pay all your credit card debts and start tightening your expenses. You can also begin to lay the groundwork for your new business when you still have a regular paycheck - e.g. setting up your home office and paying for your first marketing efforts. 

2. Plan your expenses accordingly. Good planning from the very beginning can shield you from the financial uncertainties of a new business. If you are preparing to leave a full-time job for self-employment, you will need to know how much money you will need to produce in the early months of your business to make it all work. You will also need to know your expenses, and when you should make the payments. Recording your spending patterns could help you prepare a realistic budget and have a clear idea of where your money goes. As your business grow, budgeting will remain a crucial step to managing financial uncertainties. 

3. Don't forget the taxes. As much as you would like to avoid this, you can never ignore tax payments. Be sure to put the kinds of taxes and the amounts to be paid in your budget, and prepare for this expense accordingly. The best way to deal with taxes is to deposit half of every check you receive to a special account reserved for all kinds of taxes that your business needs to pay. Deliberately ignoring your taxes and then raising money frantically for your quarterly or annual tax payments could lead you in serious trouble with tax agencies. 

4. Implement good cash flow management techniques. Lack of cash is often the kiss of death for many small businesses. To ensure that your business has adequate cash, you need to be able to collect money quickly. To do this, send out your invoices promptly, never waiting for two or four weeks after the goods or services have been delivered. Collect as quickly as you can, and avoid long-drawn out account receivables. 

5. Maintain a bread-and-butter client. While we have all been advised never to put all our eggs in one basket, maintaining a loyal client can help ensure the continuous flow of checks. Give the best possible service to your clients and offer them incentives to keep them coming back to you for more. 

6. Utilize your credit. Credit can be an effective way of managing the flow of funds. If you have credit cards, know when your card closes for the month. If your Visa closes on the fifteenth of each month, charge expenses on the 16th or 17th. This strategy is effective if you are short of cash, as it provides you with a whole month to raise the money to pay for the expenses. 

7. Market continuously. Marketing is a never-ending endeavor. The next sale starts at the close of the first and the next, and the next. Just because you have a client right now does not mean that you have to stop marketing your business. When your contract expires with the client, you will be waiting for checks in the mail in vain. The best way to even out the financial ups and downs is to make sure that you always have customers. 

8. Prioritize your payments. If money is really tight, determine what creditor/s you need to pay without delay and which can you stall. Never defer credit card payments, rent or mortgage payments, and insurance premiums. Credit card agencies are often quick to report delinquencies to credit monitoring agencies, and this could adversely affect your credit standing. Negotiate with your suppliers and request for a payment extension. Utility companies (e.g. electricity, water and telephone) often allow for a month's delay. 

9. Tighten your expenses. The secret to successfully starting and keeping a business rolling is the ability to live on less, both professionally and personally. Many new entrepreneurs cut back substantially on their lifestyle to afford the business. You need to be prepared to tighten your belt. You do not work for a Fortune 500 company anymore with an expense account to spend and supply closet at your disposal. You can ruin your business if you spend what little money you have on lavish vacations, showy furniture and other less productive trappings. Only as the business grow and prosper should you start thinking of rewarding yourself with vacations and other luxuries but definitely, it will come. 

10. Have a back-up plan. If all things fail, have a plan to help you tide over any financial shortfall, particularly in the beginning. If your spouse is employed, his or her regular paycheck could serve as your financial anchor during tough times. You can also tap any interest or dividend income you may have, from your stock holdings to rent income.

For more tips on how to start and run a business, visit the PowerHomeBiz Small and Home Business Blog