There is a lot of planning, thinking and worrying that goes into starting a business venture. There are quite a number of facets of life being affected just by considering to embark on starting a new business; psychological, emotional, mental and financial. In this case, we are interested in the financial facet of starting a new business, specifically the financial dos and don’ts involved.
Five Financial dos in starting a business
- Always work with a budget and stick to it
In business having a budget makes it easier to make better financially savvy decisions and also it helps by making bookkeeping less of a hassle to deal with.
- Don’t mix your personal and business assets
This is self-explanatory but let’s discuss it further for the newbies. To be able to make proper financial accounting of business transactions, it is advised to keep personal financial transactions apart from business transactions. This would enable a chance to have a holistic view of the business expenses and also pay the appropriate taxes as required by both local and federal taxation agencies.
- Have a well detailed plan and feasible projections
A clear sense of direction is a necessity when starting a business and a well detailed plan is the physical manifestation of that. A well detailed plan should include; goals, financial projections, targeted customer base, expected issues & problems and plans on how to tackle them. All of this might not make things easy peasy but it would give you some breathing space because the clear sense of direction would remove a lot of possible conflicts and confusion.
- Use as much technology as possible to streamline a lot of conflated processes
To save a lot of energy, time and self from a lot of mental calculations, the use of technologies such as card readers, NFC tags, spreadsheet processors, use of workflows containing vital information about inventory & deliveries and free tax programs are advised.
- Do your homework by engaging in constant research and also by being on the lookout for better quality goods and services
It has been said by many titans of the business industry that to survive one has to cannibalize their own business by innovation. Never let yourself be caught by the whirlwind of innovation by others but rather always look to blaze a new trail and research as much as possible. Secondly, always keep in mind that there are better and much more affordable deals out there. Don’t be afraid to hunt for them and switch vendors or service providers.
5 financial don’ts in starting a business
- Never rely on a specific set of customers
This is dangerous majorly because all customers make decisions to suit themselves and in certain cases their businesses. With this in mind it would be wise to note that at any point when doing business with you doesn’t suit their best interests for any reasons whatsoever, customers would unapologetically stop their patronage of your business.
- Don’t be a “yes” person
It is important to satisfy clients and customers alike but never at the detriment of your person, business or staff. Know when to say no or decline during encounters with patrons. This because not having clearly defined boundaries is a slippery slope.
- Don’t depend on your own knowledge alone. Ask as much questions as possible.
Believing you know it all is the downfall of a lot of businesses. Starting from RIM to Nokia the former European mobile phone giant. The point here is don’t rely on your research alone. Consult others in your sector as much as possible so as to be aware of current trends.
- Don’t forget to pay your taxes
Tax evasion and tax avoidance is a crime in almost every country on earth. Don’t fall a victim to the law. Keep appropriate record and pay your taxes when due.
- Don’t take things at face value because things are almost never what they seem
A lot of times, the excuse given to the authorities or the bankruptcy judge shows wilful ignorance. Properly assess situations never accept things because it looks alright or other people say it is. Satisfy your conscience by doing proper investigations before accepting situations to be what they seem to look like.
About The Writer
Benedicta Omoruyi is a professional security and investment officer (CIS), marketer and technical evangelist for InfoWARE Limited. She is a fierce writer, content creator, investment enthusiast and advocate, and an all round creative female. She writes weekly for Glazia on the column, Money Talk.