1. Spend wisely. In our current economy we all need to be careful about where we spend our money. That is certainly not to say we should stop spending altogether, but it is important to give a little more thought to expenditures. As a business owner, it is important to ask yourself whether big purchases will generate future cash and pay for themselves in a reasonable amount of time. If the item will generate cash for your business, then it might be a very wise decision to make the investment. Perhaps the item in question doesn’t generate cash, but is a need; Again, it is probably wise to make the investment now in order to keep your business running smoothly. But if the item in question is a fabulous new filing cabinet to replace the perfectly good one you already have – it might not be the best time to make that purchase.
2. Make sure your Client Deposits are sufficient. In tough economic times it is more important than ever to get an appropriate deposit from your client. We feel that 75% is sufficient to cover the actual cost of any product ordered and keep your protected. Not only does this help you maintain a good cash flow, but should your client experience a change in their financial situation you are not left holding the bag (or the custom sofa that is on order.)
3. Handle financial concerns immediately. The best way to avoid financial problems is to keep yourself up to date on exactly where you stand. When a problem does arise, don’t bury your head in the sand, deal with it immediately. Not everyone has the discipline or accounting knowledge necessary to monitor their finances objectively on their own. If that is the case (and for most of us, it is) then you need someone managing your finances for you. Someone who will bring issues to your attention and make sound recommendations to solve problems and ensure that new ones don’t arise.
4. Don’t fear the “B” word – Budgets. I have come to realize that a budget is a great tool for keeping our finances on track. Our budget serves as a guide to assist us in making good decisions each month about our spending; enabling us to achieve our financial goals. A budget will help you maintain the direction of your business and remain in control. The important thing with a budget is to make sure you have a good system in place to track spending. If it takes too much time and effort, you are less likely to stick with it.
5. Don’t obsess over your finances. Whether you have someone managing your business finances or not, it is important that fretting over your financial situation doesn’t become a daily staple in your life. Focus your energy on the aspects of your business you enjoy and are good at. Focus on what you can control and impact. You can be smart about your spending, you can make wise investments, you can handle problems in a timely fashion. You can also choose to make sure that you have qualified people helping you manage your finances in an effective manner; allowing you time to network and forge new relationships with clients, time to create and manage stunning design projects, and time to provide excellent customer service to your clients.

Author: Alexandra Gibson

Alexandra is the CEO of Gibson Design Management and Managing Partner of interior design firm, Gibson Design Group. When she's not busy trying to build an empire, you can find Alexandra riding a horse, giving back to the community, playing with her Scottie, McCord, or drinking a martini (preferably not all four at once).

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This entry was posted on Wednesday, March 4th, 2009 at 2:10 pm and is filed under Business Development, Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.