Category: Business Finance

Financial Mistakes You Should Avoid When Starting New Business

Starting a business involves a number of steps in order to get the start up that you pictured. As such, it is not difficult to find yourself derailed into making a few mistakes along the way. There are some oversights that you may make along the way that may bring about colossal problems eventually. However, when you know the common mistakes you should avoid when starting a new business, you are assured of success to your start up business. Therefore, here are the common mistakes to avoid.

Misinterpreting your market

The biggest mistake you can make in the market is misinterpretation of your market. You may overestimate or underestimate costs, gauge demand poorly, target the wrong demographic to market what you are selling. Such mistakes may lead to your start failing to take off. Therefore, you need to do a though research of your market before you begin.

Fearing failure

Fear of failure is the greatest key to the success of your business as you get to gauge the future with caution and do a thorough research prior to any move you make in your business. However, it may also hamper growth of your business in case your fear of failure hampers your progress. Texts such as Earth Source Organics Audrey Darrow can help with research on how to learn from mistakes an pick up after a setback in your business.

Delaying the launch of your business

In case you find that you are delaying your business launch because it is not perfect is a big mistake. Ensure that you have a business model or a long term plan that gives you a picture of where you want your business to be in 5years. Launch your business and work towards the long term plan that you have. According to Irina Jordan the founder of ARTISURN you may end up in an entirely different market based on changing trends in the market that you intend to place your start up business.

When you ignore Branding

When you want to start up a new business, ignoring the importance of a brand is a colossal mistake. Most business owners believe that a logo covers the branding required for their business. Avoid this slip-up as it will dampen your efforts in business growth with regard to your client base. David Salinas the CEO of Digital Surgeons mentions that your brand is similar to a definition of wheat your business is all about; therefore, you need it as an impetus to build your business into what you want it to be.

Finally, fly solo when starting up a new business. A know it all attitude greatly impedes the growth of your business. The financial advice you get from other business owners in similar business fields as yours goes a long way in ensuring that you are have the right information in your business start up to see it grow into the business that you want it to be ultimately. You will prevent overestimating costs such as hiring personnel too soon, paying yourself too much or too little, avoiding contract because you fear or spending to much on office space or making appointments at luxurious venues to lure customers. Essentially, these are some of the mistakes you should avoid when starting new business.

How to manage your business finance

Managing your business finance is the key to a successful business, the growth or downfall of your business will be determined how well you manage your business finances, the following are ways of which a business person can manage his/her business finances. Be sure to conduct your own research when it comes to your business finances. It’s also wise to contact a professional CPA accountant.

1. Open a bank account it is the easiest way to manage your finances since you can easily monitor your cash using bank statements,you are also sure about the safety of your cash since it is in safe hands, it is wise to open a savings and have a petty cash account to manage your incomes and expenses respectively.

2. Record keeping this will ensure that all incomes and expenses are recorded for future reference, it also keeps tracks of all your creditor and debtors ensuring that all debt is settled on both sides, this will also help you know how much profit or loss you are making on your business hence it will help you make wise decisions when it comes to your expenditure,record keeping is the best way of ensuring that all cash in the business is accounted for.

3. Using a financial plan this will help you to plan in advance financially of things to do in future so as to help you prepare for these activities financially, for example you might need to purchase a few assets for the expansion of your company, having a financial plan will keep you informed of the date and things to do when that date arrives, it will also inform you of how much money you need to set aside for that project that way you will be prepared financially when the time arrives.

4. Progress payment this will help you reduce your expenses by slowly paying for them in advance when you have the cash, for example you are supposed to pay your workers a certain amount of money before the end of the month, a wise business man will start to set a side little by little the required cash so that when the deadline arrives you will have the full amount required to pay the workers that way you wont have have any trouble trying to pay their salaries all at once because at times it can be stressful

5. Be Discipline it is a big part in ensuring that a businessman sticks to a code of conduct that will not allow him/her to misuse their business finance, for example keeping away from drugs and alcohol.