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Every business needs to maintain their finances in these uncertain economic climates, especially for small businesses that must continue to track financial health and manage cash flow as a foundation for long-term success. Maybe you think focusing on marketing strategies and product development is the main thing, but without controlling finances, any planning you have could be at risk. Don't worry, because SMEBrother has prepared for you a small effective guide to optimize small business finances that acts as the unsung hero for small business's success. Why is planning so important for a small business? One of the causes of company failure and bankruptcy is that they lack planning and detailed vision about where their company is going. Some things they don't realize, small business finances and marketing strategies are two things that must always go hand in hand to achieve anything to thrive their business. A plan on small business can focus and discipline not to get out of course. For example, if you want to monitor cash flow in detail, it must be done every day so that there is no miss and need to double check for secure purposes. But once you don't follow the plan, the outcome will be mediocrity. Small businesses that still have limited resources must be able to make plans to make everything they have effective and efficient, until they can expand their mobility and also take advantage of larger campaigns if finances are stable. Although every business will face its own challenges, planning for anything in a small business will ensure that the direction of the company is clear and decreased levels of risk. Why is financial planning crucial for small businesses? Financial is crucial for small businesses, because that is where their life lies. Finances are difficult to go through from the early stages of the entrepreneurial journey, because there are many things that need to be considered such as how to record finances in detail and neatly, how important cash flow management is, when is the right time to take advantage of incentives or business loans, and when is the best time for business expansion. All of these things can be achieved if the company can manage their finances well. Financial Planning: It's More Than Just a Numbers Game Not all entrepreneurs have the right background to manage company finances. Sometimes they have to get help from a financial advisor or someone who is an expert in managing cash flow. But this is also a problem for small businesses because they don't have enough money for it. The only best way is to find your own steps to learn the basics of finance, often evaluate the flow of finances, and determine what can be done to save costs or for short-term investments with minimal costs. Guide to optimizing small business finances For business owners who want to learn about small business finances, we will provide some actionable insights to maximize your business financial needs, ensuring your business continues to survive and grow. Cash flow management Cash flow is the movement of money in and out over a specific period. It is an indicator of a business's financial health and ability to sustain operations. Cash inflow is funds coming into the business such as revenues from sales, investments, loan proceeds, and other income sources. Cash outflows are funds leaving the business or expenses such as rent, utilities, salaries, loan repayments, and other costs. Cash inflow ensures that your business can continue to survive by covering expenses and investing in growth, while cash outflows are expenditures for your business to operate. Profit and cash flow must be calculated in detail, because profitable businesses can still have liquidity challenges if the cash flow is not managed well. For example, avoid using a lot of company money if most of the sales are still on credit or the payments are delayed. Regularly review financial performance Financial performance must be continuously reviewed by recording every transaction to maintain clarity in financial records. You can do categorization to ensure that all income and expenses are in their respective categories and entered in the right accounts. Keep copies of all receipts, invoices and sales records to analyze the financial data later.  Neat data collection will make it easier for you to check how much money is available in your company. Continue to track your business expenses such as recurrent expenses and variable costs. Accurate expense tracking ensures that you don't forget about tax deductions or spend too much money in certain areas. Taking advantage of business loans Business loans can be a great way to grow your small business. Access your financial needs with specific business goals, whether it’s funding operations, business expansion, purchasing equipment, or managing cash flow. You need to learn about the various types of business loans available and choose the right type that aligns with your needs. Evaluate loan terms by determining how and how much you can repay the loan, by considering the interest rate, additional fees, and repayment schedule. For example, a longer payment will reduce the cost of the loan, but increase the interest paid over time. Shorter terms have a lower interest rate, but are harder to manage with your tight cash flow. Using loan money must be done wisely because you have to know what the money is going to and how it will generate additional revenue. For example, you can use loan money to purchase equipment to speed up the production process and invest in technology to increase efficiency and potentially earn more profits. There are actually many more things that small businesses can do, such as when is the right time to invest, what is needed for business expansion, and how to manage money to advance the business in an organized manner. But we will wrap up here first, because small businesses must continue to do the 3 things above to stay survive and maximize business finances.  If you are interested in further information about how to thrive small businesses to become medium sized businesses and even bigger, visit the SMEBrother site and get everything you need for your business, starting from business loans, opening bank accounts in Hong Kong, business licensing, and everything related to SMEs.