Effective financial management is vital to the success of small businesses. However, many businesses often overlook or do not fully understand important financial aspects. Here are the financial factors you need to know to start and operate a sustainable small business.

1. Create a main financial plan
Startup budget: Determine the capital needed to start the business, including fixed asset purchases, operating expenses, and contingencies.
Sources of capital: Consider main financing options such as equity, bank loans, or raising capital from investors.
Monetary plan: Create a monetary plan to ensure that there is enough main financial source for daily operations.

2. Understand and manage costs
Fixed costs: Include employees, employee salaries, and expense accounts that do not change with business output.
Variable costs: Include raw materials, conversions, and other costs that vary by product.
Hidden costs: Unscheduled accounts such as maintenance, repairs, or legal fees.

3. Frontline management
Track income and expenses: Use accounting tools or software to record and manage cash flow.
Maintain positive cash flow: Ensure that revenue is greater than operating expenses.
Contingency risk: Always have a buffer to deal with unexpected situations such as a sudden drop or increase in revenue.

4. Determine a reasonable selling price
Cost analysis: Ensure that the selling price covers costs and generates profit.
Market research: Refer to market prices and demand to come up with a competitive price.
Calculate the break-even point: Know the minimum revenue to avoid errors.

5. Profit Management
Profit Segmentation: A portion of profits should be reinvested to expand the business, the rest can be used for accumulation or dividend payments.
Evaluate financial performance: Use indicators such as profit margin or return on equity (ROE) to measure business performance.

6. Control debt
Receivables management: Ensure customers pay on time to avoid cash flow shortages.
Payables management: Negotiate account payment activities with suppliers to optimize cash flow.
Bad debt regime: Develop a strict signal policy to minimize the risk of uncollected debts.

7. Legal and tax compliance
Business registration: Ensure businesses comply with legal regulations on establishment and operation.
Tax Management: Understand the types of taxes your business must pay, such as corporate income tax, value-added tax (VAT), and business license tax.
Financial Reporting: Prepare financial reports as required by law.

8. Use Key Tools and Services
Accounting Software: Use tools like QuickBooks, Xero, or MISA to track and analyze your key finances.
Financial Consulting: Work with an accountant or financial professional to optimize costs and maximize profits.
Learn Personal Finance: For business owners, understand how to manage personal finances and tips to ensure financial stability for your business.

Understanding the basics of finance will not only help you run your business smoothly, but also support sustainable growth over the long term. Financial management is not just about minimizing costs, but also optimizing resources to achieve the greatest profit and value.