One thing that most distinguishes business people from people who just want to start a business is their courage to take risks. Businesses tend to look at all opportunities, break their boundaries, and try new things related to the realm of their business. Not surprisingly, businesses tend to get used to solving problems and getting out of the safe zone. However, on the other hand, the courage to take risks can also make businesses make mistakes, including in matters of financial management. Here are 5 mistakes that are most often made by businessmen who are just starting a business.
1. Needs for business and personal needs are not separated Even if you start your own business, you must still separate financial for your business and finance for personal matters. If you do not separate, then in the future you yourself will be in trouble. Initially, opening two bank account accounts will indeed be difficult. However, this really helps you to deal with unexpected things that require a lot of money.
2. Suddenly making large-scale purchases When you start your own business, of course it is natural that you provide a variety of equipment that supports your business, from chairs and tables to room decoration. However, if you want to make purchases in large quantities, then you should consider it first. Is what you want to buy really needed to support the development of the business, or it can be postponed because it doesn’t really affect the progress of your business.
3. Buy personal needs at a high price In your first year of starting a business, you will find unexpected things. On the one hand, of course it can make you learn, but on the other hand, you also need to anticipate if you have to spend extra budget. If you are in a hurry to enjoy your business income by buying personal items at high prices, then later you will find it difficult to offset the finances at your place of business.
4. Not preparing funds for emergency needs As well as anticipating finances for personal matters, you also need to keep a reserve fund in your place of business. So, even if you experience something unexpected, you can still run your business as usual without any financial obstacles. According to experts and financial advisers, businesses must prepare at least three months of reserve funds that they can use in an urgent situation, both for their business and personal needs.
5. Control your finances Believe it or not, spending money is easier than getting it. Therefore, the decisions you make regarding finance in your place of business will have a big impact. Avoid making decisions in a hurry by paying attention to details such as the flow of funds that you manage. Don’t forget to plan budgets, track expenses, and prepare emergency funds.
As one of the most important elements in a business, financial management needs to be done as well as possible. So far, are you having trouble managing finances for your business?