Money matters in business. A company is only successful if it’s making a profit, so it’s crucial to get your finances right. Here are three money mistakes that newer companies and entrepreneurs tend to make, so if you’re a new company owner, be sure to avoid these things.
Not understanding that time is money
Time really is money, and so if you’re wasting time or not being as productive as possible then this will be impacting your finances. You can improve your efficiency and productivity by hiring motivated, hardworking staff. You can invest in the best software that helps you automate areas, or help your employees work smarter.
You could even upgrade your office, so that staff have a place to sit on lunch and breaks and don’t have to leave the building- potentially saving yourself many missed minutes of work over the course of the year from returning a little late. Implement a clocking in system will ensure that everyone is on time and where they should be.
Not being prepared for slower times
Sometimes, business slowing down is a result of something you’re doing wrong. Perhaps your products are poor quality, or you shipping service is slow and is putting people off. It might be a case that you just need to do an extra push with marketing.
However, there are times in the year that business will naturally be slower. After Christmas for example and into the new year, people tend to be spent out and are spending less in shops, while they pay off debt or stick to new year’s savings goals.
During January, April and July, many companies and self employed people are making tax payments which can give them less disposible income. It’s important to be prepared for slower times of the year, you need to know that you’re earning enough to at the very least, break even after covering all of your running costs.
Always have a contingency fund, or at the very least a line of credit such as access to unsecured business loans just in case.
Not sticking to a budget
In business it can be difficult to keep the books balanced, as you do have to spend money to make money. For example, in some cases you’ll need to pay more on materials but it will give you a better quality product that sells for more money.
A high quality website will cost upfront, but could give your business a professional appearance that attracts more custom. You need to know where to take shortcuts and when to pay more. You also need to ensure that every penny is budgeted for and spent in the right way.
Business budgeting and accounting software is incredibly useful, as you can plan your money efficiently as well as see where everything is being spent at just a glance. If you overspend, even by a little can cut into your profits, which could even result in you making a loss.
What’s the biggest money mistake you’ve made in business?
