These Are The 9 Financial Education Tips For Entrepreneurs.
Keeping accounts up to date is an essential attitude to ensure the survival of the business itself. So today we separate some financial education tips for entrepreneurs. You will see that accounting and resource management are not seven-headed animals.
Step by step: financial education for entrepreneurs
The guide below compiles the main strategies you should take when running a business. They will help you to face even the most unstable periods. Check out!
1. Separate your personal and business finances
There are a lot of business owners treating all the money that comes into the box as if it were their own. This is a rookie mistake!
Invoicing serves to pay the operating costs of the business. Only after all expenses are paid can you keep the remaining money. Otherwise, you run the risk of spending more than you earn.
2. Set goals and deadlines
Anyone setting up a new business is not only interested in paying bills. The company was created with a purpose – to offer cheaper products, quality service or any other experience that improves the lives of its customers. Learn the 10 financial organization tips for micro and small businesses.
Therefore, it is important to chart a roadmap to guide you towards that goal. In the business world, we call this an action plan . It is about describing what it takes to be successful, how it will be done and how long it will take to bring results.
3. Build a spending plan
The action plan also helps to predict the costs of the project. For example, setting up a store will require investment in equipment, space renovation and staff training. Branding tactics, on the other hand, will involve spending on advertising.
Oh, and we can’t ignore fixed expenses! Electricity, water, telephone/internet, inventory renewal, employees’ payroll… All of this is included in the monthly budget . You need to have the beads at the tip of the pencil. A detailed control of expenses helps you to know what your company’s minimum revenue should be.
4. Have a working capital
Working capital is enough money to support the business . To calculate it, add up all the accounts receivable (payments on time, for example) and the value of the merchandise in stock. Then decrease the amount of operating expenses.
The result of this math is how much you should have in a box to hold the ends. Thus, even in periods of low traffic, when billing may be lower than expected, the company will have money to honor fixed commitments such as rent, electricity bills and employees’ salaries.
5. Create an emergency reserve
This is not only a financial education tip for entrepreneurs, but for anyone who wants to have a more peaceful life. That’s because unforeseen events happen, so it’s good to have a strategy to solve them.
In this case, we are talking about savings to cover emergency expenses . The plumbing in the kitchen will break, or the company car will break down, and you’ll have to fix everything in a hurry, won’t you? It will be too high an expense, and perhaps not even the working capital will account for the loss.
The more money in the emergency reserve, the better. Try to accumulate at least the equivalent of the company’s six-month operating cost.
6. Control cash flow
The rhythm of inflows and outflows, or income and expenses, is known as cash flow. The idea is that the balance always ends in blue. In other words, the company’s revenue must be greater than its expenses.
Keeping track of payments is essential for you to understand what the operating costs are, determine the amount of working capital, or even identify if the business is making a profit . If the cashier closes in red, open your eyes. It is time to take some action to ensure the sustainability of the enterprise.
7. Analyze the cost-benefit of suppliers
One solution to make the business more profitable is, precisely, to reduce expenses. And you can do that by selecting the best suppliers.
Of course, the quality of the contracted products or services counts for many points in the choice. However, the price also works as a determining factor for the health of your business.
Therefore, do market research, compare the values practiced by different suppliers and try to negotiate discounts at the opportune times. Over time, you will find partners who deliver great results at a fair price.
8. Avoid unnecessary expenses
Here’s another financial education tip for entrepreneurs, employees and customers. Anyone who wants to have money to spare needs to save. And, for that, nothing better than cutting the excesses.
First, try to identify sources of waste in your company. Campaign with the internal public for a more conscious use of resources (turn off the lights when leaving the room, save water, etc). If necessary, replace equipment with more economical options.
Then, evaluate your expenses to see if there are superfluous ones . In tight budget times, any expense that is not strictly necessary can be left out.
9. Know the taxes of your segment
Finally, have you heard of tax planning ? There are a number of fees and taxes that must be paid, and they vary depending on the size and field of activity of your establishment. But it is possible to get good discounts. You just get organized.
Seek help from an accounting firm at this stage. Professionals in the field will show you which tax framework is most appropriate for your business, when is the right time to pay each tax and how to avoid fines.
So, were the financial education tips for entrepreneurs helpful? We hope that today’s content will help you in managing your venture.