Starting a new business can be exciting and fun, but often the financial side is not given due consideration. This can lead to you learning bad money habits which can be hard to break in the long term. Let us take a look at some bad money habits and how to break them.
1. Mixing personal and business finances together
When many entrepreneurs start out they use their personal bank accounts to receive payments. Though this may seem convenient at the time, it will cause many headaches for you and your accountant in the long run, especially during tax season.
It is important to open up a business account when you start your business, and use the money in this account for business-related transactions. Thereby you will be able to see how you spend your money and start to develop a good credit record for your business.
2. Being an impulsive shopper
Do you take time to think before you make a purchase, or do you buy impulsively? This could be detrimental to your business’ finances. You should always carefully consider each purchase you make. Ensure that the purchase will benefit your company and add to the profits, not deduct from them. Furthermore, try not to always buy out of convenience. If you can buy items in bulk, then it is better to do so. For example: if you buy a new pen each week from the local stationery store, it would be better to get a box of pens and store them in your stationery cupboard.
3. Not having good financial records
This is of primary importance to your company. Keeping accurate financial records will ensure that you are always aware of how your business is doing. Remember to file all your receipts. Furthermore, this will help your accountant to balance the books and allocate the purchases to the correct place in your accounts.
4. Not controlling your credit score
Your credit score is important because it will determine whether or not you will be able to get a loan to help grow your business. If you make late payments or miss payments, these are all recorded against your credit score. You will struggle to get a loan if your credit score is bad and that is why a good credit score is important. So make sure you always pay the minimum amount on time.
5. Not delegating
We have often heard that saying ‘time is money’, and this is even more true when it comes to running your business. When you focus on aspects of the business which you could delegate to another employee then you are affecting the profits of the company. You must focus on your area of expertise and delegate tasks to your staff which take your attention away from bringing business into your company.
Look at these habits and starting working on changing them today. By working incrementally on each bad habit at time, you will be on your way to owning a successful and profitable business. Go out there and crush the bad habits today.
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