Handling finances remains one of the primary responsibilities of entrepreneurs today. However, if you are like most of business owners out there, you are likely to know little about handling your money. Running your own business remains a stressful proposition – especially because you are always finding it challenging to make ends meet. If you are plagued by a series of monetary concerns at the present moment then be rest assured that there are several crucial money mistakes which you are still not able to figure out or identify. Today, we will be pointing out a few critical money mistakes made by businesses—so that you are staying away from such practices. This post, we hope, will be of help—regardless of whether you are real estate entrepreneur dealing with Real Estate Mangalore or an SEO company offering web design or development services.
Are you making these money mistakes as a small business owner?
Mistakes are part of your learning curve as an entrepreneur. However, if you are never able to identify those mistakes, you will end up getting stagnant. In fact, the bigger the financial mistakes are, the greater are the chances of you phasing out gradually from the scene. Here are a few financial mistakes of small businesses which you need to be aware of:
Combining business and personal finances
Small business owners are doing it all the time without keeping track of the kind of losses they end up suffering. You might as well be the sole owner of your business using your personal credit card to fund equipments or other business expenses. In this manner, it gets difficult for you to calculate profits accurately. The taxes turn out to be an even bigger headache. IRS might as well end up believing that you have purchased personal items with your personal funds and have deducted them as business expenses. If you are not maintaining separate banking accounts for business and personal funds then securing business loans gets difficult as well. The situation worsens when you have got business partners on board.
Not investing in competent accounting skills
Again a very common entrepreneurial error! You might as well end up managing all the financial tasks yourself or investing in the cheapest possible option—someone who only has basic skills in accounting. It is very important to invest in a competent accountant or finance manager. You can go on to ask your peers if they can suggest any name in this regard or not. The competency of the accountant can be gauged from his ability to handle taxes, payroll and creditors diligently.
Seeking credit too late
What do most of the entrepreneurs do? Seek business line of credit when their business are not running well or are at the brink of extinction. This is absolutely not the right time to approach lenders since they have little confidence in your repayment capacity. Instead, seek help when your business is running rock solid and the lenders are convinced of your repayment capacity.
In a bid to lure clients in the highly competitive market, businesses have clearly gone overboard with their under pricing gimmicks. No doubt most of them are in red today!