Step 5 of 5

Stay out of debt

Now that you are out of debt, you want to keep it that way. How do you avoid ending up in the same situation? Here are 8 tips on how to keep a grip on your finances.

1. Insight through overview

Make sure you keep an overview of your income and expenses. If you find this difficult, hire a bookkeeper or accountant to help you. Or ask your contact at the municipality. Discuss the financial situation regularly. 

2. Use your records when you need to take decisions

You are in charge. You need to understand what the figures mean, and which choices are or are not financially sound. Even if you hire an accountant or bookkeeper, or if a member of staff keeps the books for you. 

Watch the video 6 tips to increase your financial insight

3. Big plans? Do research first

Do you want to invest or spend a large sum? To take well-advised decisions, you have to do research. Do market research and take into account how your plan will influence your finances. Draw up a financial plan. Use your bookkeeper as a sounding board while making plans.

4. Build a financial buffer

Your financial position is never certain. A financial reserve or buffer helps you cope with financial adversity. For instance, a staff member who falls ill and who you have to continue to pay and replace, or a payment that comes much later than expected. 

Talk to your bookkeeper about how high the financial buffer for your business should be. Make sure that you have some savings, and that you know where to go for money if you need it. For example, an additional loan from family or friends, or alternative financing. Take out insurance against risks you cannot, or do not want, to pay for yourself. Use credit insurance to avoid the risk of non-paying customers. Or opt for factoring.

5. Increase your income

There are several ways to increase your income. These include:

  • launching a new or improved product or service
  • choosing a different revenue model
  • changing your business management, organisation culture, and processes
  • using subsidies and schemes
  • taking a (part-time) job for the continuity of your income

6. Use online accountancy software

There are advantages to keeping your records online, if you want to keep a grip on your finances. Online accountancy software works faster, and you do not have to re-enter everything by hand. That way, you avoid mistakes. Discuss your choice of software program with your bookkeeper or accountant. 

You are also allowed to use paper records, Excel sheets, or homemade accountancy software based on open source accountancy software. As long as you observe the legal requirements

7. Grow your business network

Your business needs to be visible to succeed. Get in touch with other entrepreneurs and build a business network by simply joining a business club. A network helps to increase brand awareness for your business, and you can exchange questions and information. You can also get information from sector organisations (scroll down to 'Find your sector organisation'). They know what the rules and regulations are, and often offer advice to their members.

8. Get help in time

Being an entrepreneur means persevering, adjusting, and making choices. It is not always easy. Remember that you do not have to do everything on your own. Maybe the people around you are already helping you, but know that there are professionals you can turn to as well. KVK collaborates with numerous organisations and parties that strive to help entrepreneurs in the Netherlands. Find out what this professional network can do for you. You are not alone.

Questions? Call the KVK Advice Team

Do you have questions about the steps of this plan? Or do you want to discuss your next step with an expert? Pose your questions to the experienced KVK advisers. They can listen, think along, and refer you to a partner in the KVK network, if necessary. Call free: 088 585 22 22.