7 Money Management Tips for New Small Business Owners

According to an infographic put together by Business Insider, there are almost 28 million small businesses in the US and over 22 million are self-employed. In addition, over 543,000 small businesses are started each month. If you recently joined those ranks, congratulations! It takes a lot of courage in today's challenging economic environment. A macro view of the competitive landscape, however, can really drive home what you're up against. If you're going to beat the odds and turn your startup into a success, you've got to begin by mastering the basics - and one of the most fundamental is money management. 

1. Save as Much as You Can Get certain office supplies for free by participating in the rewards program at your favorite office supply retailer. Subscribe to its newsletter for alerts on sales and purchase your pens, printer paper, note cards, and more at full price, then receive a rewards certificate for the entire amount the following quarter. For marketing, skip the expensive stuff and go with social media. Haggle with vendors before you sign on the dotted line, and limit your staff hiring in the beginning. If you manage your time correctly you can probably get a lot of the work done yourself.

2. Closely Monitor Cash Flow Cash flow is the lifeblood of your business, especially in the beginning. The right amount depends on your business model, revenues, and expenses - just make sure you've got enough in the bank to take care of your operational needs. If you see an impending shortfall, reach out to your late-paying clients or offer a nominal discount to others for submitting their payments early. To help you monitor cash flow, try out Xero, which allows you to view your cash flow in real time. You can create and send invoices, pay your business bills, and reconcile bank statements. There's a mobile app as well.

3. Choose the Right Business Credit Card Business credit cards, just like their consumer counterparts, come in many shapes and sizes. However, they're not governed by the Credit CARD Act, which means your rate and terms can change at any time. You may be subject to excessive overlimit fees, as well. Look for a card with a low APR and either a cash-back program or a rewards program that specifically benefits your business.

4. Segregate Personal Expenses From Your Business Once you find the right business card, make sure you charge all expenses to it and reserve any personal purchases for your consumer credit cards. Mixing the two makes it more difficult to manage your business finances, and it's going to complicate things pretty heavily come tax time - not to mention the inconveniences an audit by the IRS would bring. For help with business expense management, consider taking advantage of Concur, which offers automation and other tools to streamline business bills and charges. It's paperless so you don't have to keep track of physical receipts, and also features a mobile app.

5. Estimate and Pay Your Quarterly Taxes If you just hung your shingle, don't automatically think that you can wait until next April to pay your taxes - they might be due each quarter. Consult IRS Publication 505 to determine when your payments are expected. Then, note the due dates, estimate what you owe, and get your payments in on time.

6. Pay Yourself Modestly This is not the time for you to take in a high salary - there are too many other financial concerns right now. Of course, you don't want to cut yourself short, but you should consider a salary that allows you to pay your monthly bills, contribute to your retirement investments and emergency fund, and have a minimal amount left over for personal purchases. Once your business succeeds, you're going to have plenty of time to bump up your level of compensation.

7. Choose Your Financing Wisely If your business needs funds, it pays to research your financing options. For instance, time lost to a lengthy application and funding process could delay your operations or worse. If you're looking for a small business loan or line of credit, check out the websites Kabbage and OnDeck. Applications only take a few minutes, approval is instantaneous, and funds are available immediately.

Final Thoughts Whenever you're looking for more information about a particular topic - money management included - take the time to network with other small business owners. If your schedule allows, attend the Small Business Web Summit in Boston on October 29, 2014. It's geared toward folks in need of cloud software and offers a great opportunity to connect with the B2B cloud industry. If you go, don't miss the panel that Yodlee Interactive is hosting: "How APIs Are Driving Innovation in Small Business Solutions." However you do it, take steps toward better money management today. The effort may take some time, but you'll set a good precedent, and your business will benefit in the long run. What other money management tips can you think of for new small business owners?