Not many entrepreneurs know a lot of things about finances. In fact, some businesses fail because their funds were mismanaged. The problem is, whether you like it or not, finances are an important factor when running a business – both big and small.
Here are some helpful financing tips that can surely do more good to any business:
Do Not Procrastinate
One of the biggest mistakes that entrepreneurs make is that they actually put-off their bookkeeping needs for another day. Small business bookkeeping can be made simple. If you learn to break everything down into small categories, the whole thing becomes much more manageable, thus, the compulsion to put it off can be avoided. You can start by categorizing expenses, sending invoices, and paying employees.
Understand Seasonal Cash Flow
Start-ups should understand seasonal cash flow. There are major seasonal spikes that occur during tax season, and there are also some slow conversions from April to October. This is not an easy thing to learn but business owners should realize that there is a great need to maintain a three- to four-month cash cushion in case the company needs help to get through these slower periods.
Focus on Core Strengths
Some business owners think that they have to create everything from scratch. While that is ideally fine, it wastes time and resources. It’s a far more cost-effective strategy to work with your existing providers and use existing tools that they’ve already perfected – as opposed to trying to reinvent everything on your own.
Ask for Discounts
If you are working on a tight budget or available funds but you still want to take advantage of existing solutions, you can try emailing the founder to ask for a discount. It might not work in every case, but you will be surprised by how often you can get free stuff just by asking.
Working 80 Hours a Week is Not Profitable
Allan Branch, a financial expert, said that if you have to work for 80 hours a week just to keep your business afloat, then you are not profitable. Some entrepreneurs blow through the earliest stages of their business’ growth by putting all their energy and time into their businesses at the expense of their own health and personal relationships. As much as that is okay for certain occasions, it still shouldn’t be a part of your long-term financial calculations. Simply put, it is not sustainable. If your company is thriving because you’re working yourself to the bone, then your numbers are bound to take a major turn once you scale back your workload. Either that or you collapse from exhaustion, whichever happens first.