Money Blunders That Can Cost You Big In Business

kaboompics

The American dream of owning a business may be alive and well, but for your company to remain this way, you need to avoid becoming a statistic. While the true figure is widely debated, most believe that eight in ten small businesses fail, with many of those being in the first year or so. There are lots of reasons this can happen, but one of the most disastrous is poor money management. With that in mind, here are six money blunders you can’t afford to make.

1. Working Without A Budget

Although it isn’t the most interesting task on the planet, planning a budget for your business is absolutely essential. After all, if you spend money as and when you like, chances are, you’ll spend more than you have. You may also forget about financial obligations, which can leave you with even less cash. To avoid this, you should stick to your budget and update it when needed.

2. Hiring Too Many Employees

No business owner should do everything alone, but that doesn’t mean a team of permanent employees is the answer. If you need a marketing or financial consultant, for example, you could outsource to a freelancer instead. While there are variations in consultant salaries, this will almost always be the cheaper option. This is because training and benefits aren’t required.

3. Waiting To Seek Credit

The absolute worst time for a business to seek credit is when they actually need it. In fact, it’s often impossible to find funding in these circumstances, and, if you can, it will likely cost you much more than it usually would. To save yourself time and unnecessary worry, you should do your research and secure lines of credit sooner, rather than later.

4. Having No Emergency Plan

Of course, if you plan for an emergency now, you won’t need to put yourself into debt by borrowing money later. This is why you should make sure that you set aside some cash each month and build a business emergency fund. If you’re on a tight budget, this can be tricky, but it’s a crucial task nonetheless. For this reason, you should work to cut down your business costs.

5. Using The Same Account

Keeping the money for your business and personal lives in one account may seem like a convenient choice, but it can actually make your life a lot harder. After all, when all of your money is mixed together, it’s almost impossible to tell what belongs to you and what belongs to your company, making it likely that you’ll spend what isn’t yours. Opening a business account can prevent this.

6. Avoiding The Essential Purchases

With money being such an important asset in the business world, it’s no wonder that so many entrepreneurs do everything that they can to spend less of theirs. However, that doesn’t mean that you should eliminate spending altogether. If you want to grow your company, then you need to invest in the essentials required to make that happen, like equipment and professional services.

Money keeps the business world turning, so take care of yours by avoiding the blunders listed above.

0 Responses to “Money Blunders That Can Cost You Big In Business”


  • No Comments

Leave a Reply