If you are a new entrepreneur, just starting your new venture, listen up in order to avoid common financial mistakes. According to the Small Business Administration, about two-thirds of businesses with employees survive at least 2 years and about half survive at least 5 years. As one would expect, after the first few relatively volatile years, survival rates flatten out. A high percentage of entrepreneurs will experience failure within the first year of their business because they do not have enough cash. (Source: Bureau of Labor Statistics, Business Employment Dynamics.)
So what do you need to know to survive?
For starters, it’s imperative that you grab a strong hold on your financial situation, in order to avoid common financial mistakes. When you have a tight grip on your finances, you will be able to avoid some of the mistakes that many entrepreneurs make. When you have proper knowledge of your finances, you will have an easier time getting your start-up off the ground.
1. Plan Ahead!
You want to make sure that you are able to plan ahead for any unforeseen disasters. We know that you cannot see into the future, but when you plan ahead, you will be prepared for anything. When you are prepared for emergencies, you will save yourself from frustrations and headaches in the future.
2. Budget, Budget, Budget!
Aside from making plans, you need to make sure your budget is part of your financial plan’s foundation. Your budget will give you the ability to keep track of the amount of cash you have, your current expenses, and the revenue that you need to grow your company. Your budget will also give you the opportunity to meet all of your business goals. We encourage you to make updates to your budget on a regular basis.
3. Finance 101: Brush Up On Your Skills
One of the skills you should have as an entrepreneur is financial literacy. You have to know your financial position in order to make the right decisions. Gain an understanding of your finances and find a way to organize your finances and your documents. Are you ready to make smart decisions so you can make waves in your industry?
Remember, running a business successfully does not need to be complicated. Keep it simple!
For more interesting topics on successfully managing the challenges of growing your business profitably, please search our blog at our website www.portalcfo.com.
Manny Skevofilax is a consultant and speaker that helps his clients successfully navigate the challenges of growing their businesses profitably. Since 2003, Manny helps businesses enhance their results by using his experience in strategic planning, financial statement analysis, operations, organizational development, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at email@example.com.