By CHINKEE TAN
IT has been said many times that starting a business is not easy.
But thanks to the various financial principles that we have learned, we are somehow equipped when it comes to handling our finances.
Although managing our personal finances can be quite different from that of managing a business, they still operate on the same values of acquiring, keeping, and growing our money.
But to be very specific about business startup and to help you avoid some of the most common money mistakes that startup entrepreneurs make, I want to share these financial tips:
Practice good financial management
Running out of funds – this is the very reason startup businesses close down. The key to ensuring that your money stays in the right places is good financial management.
A skill that we all know doesn’t develop overnight but with proper discipline and habit-formation. This becomes less of a work for people who have already established a good foundation of managing their personal finances and can pose as a challenge for those who have yet to learn it. If we don’t learn to stay on top of our business finances, we put our business in a dangerous position. The fact of the matter is, having good ideas might not be enough for running a business because when money runs out, we hit rock-bottom.
In managing business finances, establishing a budget and sticking to that budget is still the key.
Track all expenses
Expenses will come at you from different directions as you do your startup this is why tracking and monitoring all expenses is important and must be practiced. Some startup entrepreneurs hire accountants to do the accounting for their business but this can be a bit costly for those who start with limited funds.
If you want to save cost, you can make use of available accounting software that can help you track your business expenses instead of spending money to pay for a professional to do the work.
Keep your expenses low-key as you start your business
Learning to have low-key expenses as you start your business might just be the formula to keep your business up and running.
Choose to operate without spending so much so you can allocate most of your capital to things that will make the business grow. Having a fancy work space, top of the line work gadgets, and lavish meal allowances will only drain your business money.
Establish financial goals
Does this sound familiar to you? Sure it does! We also talked about establishing financial goals in our personal financial journey. This is also necessary when it comes to business.
Instead of having broad and vague goals such as “becoming the best entrepreneur” or “becoming a millionaire,” learn to make SMART goals – specific, measurable, attainable, realistic, and time-bound.
How do you translate this to your business? Start by making weekly or monthly revenue goals, in this way, you can set milestones and targets as the business grows.
Value your time
For business people, time and money are directly proportional in such a way that the more time you have, the more chances you have of acquiring more money. Hence, for them, time is money. And because you’re on the startup phase of your business, it’s time for you to change your mind set about the value of time.
Nothing is more valuable than your time you value every minute of your time. Every second spent doing things that are not related to your business is wasted money down the drain.
Pay yourself first (still)
This one’s another familiar principle. Why do you need to pay yourself first? Realistically speaking, hard work and dedication to your business will not pay the bills nor put food on your table.
Making sure that you get money as a payment for all the work that you do (others refer to this as self-employment) will ensure that you will not be using the business money for your personal spending.
THINK. REFLECT. APPLY.
How does managing your personal finances impact the way you manage your business money? How can financial stress affect your startup business? Why is it important to keep a low-key spending habit during business startups?
Gusto mo ba mag-NEGOSYO pero di mo alam kung paano mag-umpisa? Join me on Aug. 28, 9 p.m., via private FB live. For more info, visit chinkeetan.com/juannegosyante.
