The key objectives of financial management would be to create wealth for the business, generate cash, and provide an adequate return on investment bearing in mind the risks that the business is taking and the resources invested. Here are a few pointers:
1. Build a Cash Reserve – You should have your personal cash in reserves before you start your business. Profit may not come in right away so you need to keep some cash aside in case you need to use it for paying taxes.
2. Debt-income Ratio – Your chances of getting a business loan are reduced by debt, even if you have the projected income to repay them. If you are able to focus on repaying all your personal debt prior to opening a business or as early as just the beginning of the business, then try your best to do so.
3. Avoid Over investing – Avoid over investing on stuff including, computers, and inventory overload. You have to keep your mind directed at building a good product and customer experience.
4. Separate Personal Finances from Business Finances – By doing this it not only reduces your personal liability but also gives your business credibility. It also helps manage your taxes, bills and other payments.
5. Speak to a Finance Expert – Getting an experts advice like an accountant or a tax advisor will help you with making mistakes with tax regulations.
6. Pay yourself – You should never pay yourself a salary. You might get caught up in the profit in the beginning of your business but you need to set aside money that will be just for you separating personal finances and business finances.