Entrepreneurs are risk takers. The fact you’re starting a business meant you’re gambling your investment not knowing whether or not it will be successful. However, the routine risk-taking can take a toll on your business. This is the very reason why businessmen should be extra cautious when handling financial matters.
If you’re an owner of a small business or is about to start a new one, make sure to learn about these six deadly money mistakes often made by first-time entrepreneurs.
Mistake #1: Hitting it up with a solid business plan
Having no solid business plan is like having no foundation to keep your company on its track. It should not only consist of your SMART goals but how you plan on making your dream goals a reality, your back up plans and even how to reduce risks that comes with operating a business.
Mistake #2: Having a single account for your personal and business use
It doesn’t matter if you’re the only owner of the company or not. Although it is convenient to have a single account for everything, but in reality, it will only confuse you once accounting time arrives. Make sure to open a separate account for your business. Do this right at the beginning, and you’ll find it easier to plan tax estimates, pay bills and do your accounting. You’ll also find it easier to track where your business stands, and if your company doesn’t work out, you get to save yourself by not damaging your credit scores.
Mistake #3: Irresponsible use of credit card for your business
It’s normal for business owners to use credit cards since they are so convenient to use. However, just like your personal CC, relying on your card can be your downfall. Make sure only to use your business credit card when necessary, and to pay off bills on time and in full. If you can, switch to debit cards to avoid the unnecessary interest charge.
Good Read: How to Use Small Business Credit Cards
Mistake #4: Thinking your small business doesn’t need insurance
Business insurance is not just another added expense but an actual need for every business. Every company faces different risks depending on your industry, the goods and the services you offer, etc. A Business Insurance Broker Perth can help you mitigate risks by giving you expert advice on which policies will best suit your needs.
Mistake #5: Unorganized cash flow and financial reports
If you fail to plan cash flow and organize financial statements, you won’t be able to accurately check whether or not you are making revenue or how much money you’re making. This will give you a hard time during accounting time, will have difficulties filing correct taxes and can, in turn, get you in trouble in the future.
Mistake #6: Only giving your customers a few payment options
Some companies tend to have cash-only policy while others also accept debit and credit card payments. This works only if you’re a local store without an online shop. However, if you want to give your business a boost and wants to seal every possible sale, consider other payment solutions such as checks and online payments.
Good Read: Boost Sales With Numerous Payment Options
The road towards having a successful business may not be that easy but is not impossible. By mitigating financial risks and learning from these six money mistakes, you can get the most out of your business
Infographic created by Clover, a payment processing company