One of the hardest things about being a business owner is managing your finances. Small businesses in the tobacco industry have the potential to earn a lot of money, but it takes a comprehensive financial strategy to maximize your revenue.
There are plenty of tobacco companies that folded because they made poor business decisions, but your company doesn’t have to become another statistic. With the right financial tips, your business can flourish by cutting costs and increasing cash flow. In this brief article, we’ll discuss some tips a CFO service might give you to help you manage your finances.
Classify your tobacco startup as an LLC.
As you know, business risks are part of being an entrepreneur. However, you don’t want to take risks when it comes to declaring your company’s tax status. One thing a CFO advisory service might tell you is to declare your business an LLC rather than a sole proprietorship.
The great thing about your company having an LLC is that it limits your personal liability for finances. That means no one can come at your personal finances for damages or liabilities accrued by your company. The role of the CFO is to help entrepreneurs make wise financial decisions, and declaring your company an LLC is one of the smartest things you can do for your business.
Invest in new technology to improve operation and cost-efficiency.
A great way to improve cost-efficiency and improve operational processes is to invest in new technology. Indeed, investing in technology can be expensive, but it’s all about the return on the investment.
A great example would be switching to the CoolJarz pop top for your herbs and loose tobacco products. These containers are made with up to 50 percent less plastic than similar containers, making them cheaper to manufacture and better for the environment.
Create a marketing budget.
Marketing is one of the most important aspects of growing your business. It’s a good idea to create a marketing budget to ensure you always have the capital to create engaging marketing campaigns.
One thing your CFO might tell you is to outsource your digital marketing efforts to an SEO or marketing agency rather than try to manage your marketing yourself. You might think your CFO’s job is to tell you not to spend money, but a good CFO will also tell you when it’s better to invest in professional services than to try to DIY something that’s beyond your expertise.
Outsource instead of hiring a full-time CFO.
Another thing an advisory service will tell you is that it’s much more affordable to outsource to fractional CFO services rather than hire a full-time accountant or CFO. The great thing about outsourcing is you only pay for the services you need rather than having to pay an accountant’s salary whether or not they’re working.
Small businesses in the tobacco industry have an excellent opportunity to generate massive amounts of cash flow. Indeed, the tobacco industry is large, and a CFO would tell you that you have a prime opportunity to make significant profits. Many tobacco companies are distressed companies within a few years, and it’s due largely to not having a strategic plan for managing finances.
One of the first things a CFO would tell you is to declare your company as an LLC, which limits business owners’ tax liability. They might also tell you that you need to have an annual financial plan to guide your spending. Furthermore, you should also create a marketing budget to use for growing your business, and finally, invest in new technology for cost-effective solutions and process improvement. With these financial tips, your tobacco company could be on its way to the top of the industry.