How to manage an SME
1. Managing the economy of an SME is essential for its success
Know manage the economy of an SME or a business is as important as mastering any technical aspect.
One of the first lessons learned by entrepreneurs is that economic management takes up a large part of the available time.
Although the business management is a fundamental aspect for our business, we also have to make the right decisions, surround ourselves with competent specialists and absorb all possible knowledge.
2. Useful recommendations for managing the economy of an SME
What are the keys to economic management and financing for freelancers?
There are multiple invaluable concepts, tricks and discoveries, as well as some necessary attitudes.
We make a brief summary of the most important recommendations:
2.1. economy comes first
Even if your product is wonderful and your customers are the best, if the accounts don't add up, it's useless.
Failure is in the numbers!
Therefore, You must surround yourself with expert professionals and take their opinions into account in decision-making.
2.2. Be prudent and do not go to the limit
The company's treasury refers to the availability of cash to meet immediate payments.
You should always operate with a cheap mattress.
The unforeseen happen: a delay in collections, the unexpected return of an order, an unforeseeable expense...
In this context, obtaining financing before you need it is easier than after. So, we recommend that you be prudent and always seek to anticipate possible shortages of working capital.
2.3. Profit and company treasury are different things
This is another concept that can give you big headaches.
It is possible that you have signed a good number of important contracts and you are working very hard.
However, until you collect them, your company treasury could be dying and you may not be able to meet your payments to employees, suppliers and the Treasury.
The opposite can also occur. You have partially collected an important invoice and you have good money in the box, but you don't have enough to buy the rest of the raw materials you need to fulfill the rest of the order.
In this case, you will hardly get the benefit if you don't get a good financing for freelancers and companies.
2.4. Separate the VAT from your monetary movements
What you enter from the value added tax is not your money. You have to deliver it to the Treasury at the end of each quarter. If you have not taken it into account, the mismatch will be considerable.
The same happens with the Personal income tax contributions for the self-employed.
Entrepreneurs and the self-employed are mere intermediaries and, although you can always ask for a moratorium to pay, the interest is considerable.
For this reason, we recommend that you request alternative financing to get out of trouble.
2.5. The wage cost is more than the sum of all wages
Be careful with this aspect.
Not just because you have to consider collective agreements and respect minimum wages. Also because you must consider gross wages, not net, and Social Security contributions.
2.6. Define and value based on the break-even point
This criterion is crucial to manage the economy of an SME or a freelancer.
The equilibrium point is the number of products or services that you must market, at the established price and considering the costs, to have benefit.
This calculation is essential to control treasury, financing, business objectives, the number of employees, and investment decisions. marketing.
In any case, the main criteria for manage the SME economy they require common sense, technical knowledge and a point of experience. Or, failing that, great advice. So don't hesitate: surround yourself with the best.
Contact Workcapital, without obligation!
We will be happy to help you.
