Money management is of extreme importance if you are an Entrepreneur (or wish to be one), and could be the difference between success and failure. It can also affect the performance of your business. If you have a problem with money management, then you will have a problem making your business profitable, or even running your day to day business, because, let’s face it: a business runs on money.
There is a saying
“Rich people remain rich by behaving like the poor, while many poor people remain poor by behaving like the rich”,
Many entrepreneurs get into business because there are creative and enjoy a lifestyle that is flexible, it is unlikely you chose this path because you love managing costs, receivables and cash flow (Finance Management), especially when these are seen as tasks for your accountant. In reality to succeed in business you must manage the bottom line (the profit), this is the responsibility of the business owner not the accountant. Entrepreneurs need to understand the financial ins and outs (flow of money) of every aspect of their company’s business operation.
Here are some Money Management Tips for Entrepreneurs and Business Owners
1. Know and manage your credit Score
Almost 30 per cent of people don’t know their credit score, as an entrepreneur you must know and manage your credit score A little-known fact among aspiring entrepreneurs is that the funding a new business receives is often dependent on the founder’s credit score.
2. Keep you Personal Business Money Separate
Some Entrepreneurs uses a personal account for business transaction or their business account for personal transactions – this can result in problems with the tax man in the long run and it may also be difficult to truly understand what’s your true business expenses and profit
You have to know that a business (especially a limited company) is a legal (detached from another business or individual with respect to accountability) entity like another human being, and before you can help that other person succeed, you have to understand how to maximize your own strengths and manage your weaknesses first.
When it comes to managing your Business Money it’s very easy to lose track of your accounts. That said, it’s easy to become disorganized very quickly. When it comes to managing your money, you want to do whatever it takes to stay organized. That way you can easily track your progress and make changes wherever necessary.
First and foremost, you should try and utilize digital accounting tools like online receipts tracking, invoicing and expense management. These platforms allow you to keep accounts receivables and payables organized and in the cloud. Once you find the right online payments solution then you should run quarterly check-ups on your finances. See what works what doesn’t and always look to improve.
Find a Money Mastery mentor
As an individual, you can seek out financial advisors and mentors that can help you with personal finances. As an entrepreneur, you should also work with these people or seek out more established financial consultants that provide you with guidance you need to run your business.
Managing your finances and running your business can be very challenging but ultimately it should be a rewarding experience. When you work with a Money Mastery mentor, you’ll improve your personal and business finances and set yourself up for entrepreneurial money management success.