YOUR SMALL BUSINESS AND YOUR FINANCES

knowledgecentre (33)in #business • 7 years ago (edited)

An entrepreneur must learn to save and build wealth. A famous and successful entrepreneur once said, "The wise (entrepreneur) saves for the future, but the foolish (entrepreneur) man spends whatever he gets."

Too many young entrepreneurs lack business sense - they mingle their business funds with their personal funds, and yet the wonder why they're struggling in business. They work very hard, yet they have nothing to show for it. I've been there. I know what it means to work hard without nothing worthwhile - enough cash in the bank - to show for my hard work. For several years, I struggled as an entrepreneur because I kept using my business funds to pay for my personal life. I was not mindful of my finances. (This is a story for another day.)

An entrepreneur must learn to work hard and work smart. If you refuse to work hard, no matter how smart you think you're working, you'll go hungry! Are you making enough money that you can put it away for the future? It's not enough to work smart, you must also work hard. It's smart work and hard work that brings success. Anyone who tells you otherwise is lying to you. "Take a lesson from the ants, you lazy fellow. Learn from their ways and be wise! For though they have no king to make them work, yet they LABOUR ALL SUMMER , GATHERING FOOD FOR THE WINTER. But you - all you do is sleep. When will you wake up?"

To build a business you're proud of, you must start by separating your business funds and personal funds. You don't just take money from your business and spend it whenever you feel like it. You'll kill your business that way. You need to be mindful of your cash flow - how much money is coming in and how money is going out. Keep track of everything. Those who are ignorant of how business works will call you "stingy". Just ignore them and keep building your business - track every penny, negotiate everything, and find ways to increase your margins. Business is a game of margins.

You must also think of your business as a job, even though you own it. Pay yourself like an employee. Doing this helps you avoid using your business funds to pay for your personal life and it sets you on the path of undeniable success.

It's important you keep your business funds and personal funds separate and have a budget for them. How much do you plan to make every year - business and personal? How many products or services do you need to sell to hit your financial target for the year? Develop a daily, weekly and monthly plan. Review them weekly or monthly to know whether you're on track. And remember to plan for your taxes and the future. Smart entrepreneurs don't just work hard and smart; they save for the future.

I wish you success in your business.