If you want to be a smart entrepreneur and have success, then you’ve got to think past just having a gun idea.
The most successful business people I know have the financial basics covered. This is the stuff that not only helps make a business tick over, but make it succeed.
By following these six basic steps, and building on them later, you can set your sights on a little more entrepreneurial stability from the start-up.
Become a financially smart entrepreneur
Bank basics – avoid the fees! Get stuck into reviewing your current bank accounts, and figure out if they are suitable for your business and personal life. Can you get the same, efficient service for cheaper using a different bank?
If you are a start-up company, certain banks will waive the monthly bank fee from your account for up to a year. Talk to your bank representative and see what kinds of accounts are available.
There are also simpler ways of avoiding bank fees as well, such as using ATMs only affiliated with your bank.
Insurance – it’s kinda important! The worst time to find out your underinsured is after an incident occurs when you’re trying to put a claim through. So if you already have a policy, review it.
If you’re unsatisfied, start searching other insurance policies.
Then ask yourself, have you advised your insurer of any changed circumstances that could potentially affect your premiums? And have you sought advice and quotes from more than one broker?
Superannuation. If you’ve ever thought about this and you know you have or could have multiple super funds, knows the time to address this.
Did you know that the less super funds you have, the less you pay in management fees? Check for any lost super here.
It may be in your interest to contribute extra super in addition to the mandatory 9.25 per cent super paid by your employer; however, find out and understand the tax implications of this before doing so.
Financial goals. Just as you plan out your business, marketing and growth, put some thought into your financial goals.
What are your goals for your business, as well as for your personal finances?
Establish goals and their deadlines. For instance you could aim to save $50,000 towards a house deposit by the end of this year, but the attainability may be dependent on how much you profit. So, you could increase sales by 10 per cent in the next three months as a means of profiting strategically in order to save $50,000.
Budget wisely. Make a plan on how you will spend and preserve your money.
When you don’t budget, you can potentially spend carelessly, further depriving yourself the financial umbrella you may need on a rainy day.
When budgeting, take your entrepreneurial and personal goals into account. The way someone spends their money is a reflection of their values, and if you value your small business, budget effectively and with care.
Advice and networking. If you are unclear about anything in relation to your finances; be it taxes, savings, debt elimination, or investments, speak to someone trustworthy.
Confide in experts, respected mentors and networks. You can also learn from others’ mistakes by reading books and keeping up to date with financial magazines.
According to Entrepreneur Magazine, some of the common qualities among successful small businesses are financial planning, practiced strategies, and a work-life balance.
