Are you wondering how to manage money as a business owner? You are not alone. Every day, new businesses are created and the business owners struggle to manage their finances.
That’s why, in this article, I’ll show you some good things you can do to manage your finances.
The goal is to understand why you are currently struggling to manage money. Then we’d find solutions to this problem.
There are a lot of solo entrepreneurs out there struggling to get their finances right. I’ve noticed this problem and I want to show you exactly how you can solve it.
4 reasons you can’t manage money as a business owner?
There are many reasons why you might not be able to manage money as a business owner.
It all comes down to these things listed down below. After discovering these causes, we’ll look into the process of overcoming them.
1. Not know your priorities
As a business owner, there are many things you can spend your money on. Some things looks so promising and enticing that you always want to buy them.
This is one of the core reasons why most business owners are unable to manage money.
You see, if you don’t know the exact things you should be buying every month but jump around buying whatever you feel like.
You might end up mismanaging money. This is a very big problem for business with little startup capital.
2. Spending all your money on expenses
Robert Kiyosaki says these are liabilities. A liability is anything that takes money out of your pocket. You should avoid this as much as possible. Try to reduce you liabilities and increase your assets.
Most importantly, don’t spend ALL your business money on expenses. This can cause your business to fall short of cash. If you spend all your money on expenses, there would be none left to reinvest and this is very bad.
3. Not automating your savings
This is a very big reason why business owners are not able to manage money. When your saving is not automatic, you would still continue contemplating whether or not to save some.
Whereas, if your savings are done automatically, it will teach you discipline. And this can help you manage money. Don’t worry, I’ll show you how to save money automatically as you read on.
4. Having too many staffs earlier on
This is a very big problem many business owners face earlier on in their businesses. You want to automate as many things as possible so you end up employing more employee than you really need.
This could bring your business down.
Now that we’ve seen some of the reasons most business owners are unable to save money. Here are 4 ways to manage your money properly.
4 ways to manage money as a business owner
1. Set your priorities straight
Write down the most important things your business needs. What are the core things you can’t do without? What are the ones you can leave behind without buying?
When you set your priorities the right way and know the most important things you should spend money on, your expenses will greatly be reduced. You will also be able to do better things with the extra money that would be left.
2. Pay yourself first
If you really want to be able to manage money, you must learn to pay yourself first. This is really the most important thing. When you make money from your business, pay yourself first by removing a portion of that money to reinvest in your business.
Do this before you even think of paying your debt? Before you even think of buying groceries or any other liabilities.
This will help you manage the remaining to solve other business related problems.
3. Save money automatically
There are many applications that can help you save money automatically. The one I use is the piggyvest app. You can set auto savings on the piggyvest platform.
Once you authorize it, you would set a date and the amount you want to save. Leave the rest to the app. It will do it perfectly.
Once the date you set is reached, it will automatically bill you that money and save it on your wallet even without your consent.
This teaches you discipline. I’d also recommend that you use the safelock feature on their website. Basically what this does it that it locks the money until a certain period of time.
With this money locked away, you won’t be tempted to touch it until the date you set to withdraw it.
4. Employ only those you truly need
Write a list comprising of everything you do on your business. Then think about the number of employees that would be able to carry out all the tasks effectively.
Make sure you only employ more staffs when their impact will be big.
Why is it important to manage money as a business owner?
As a business owner, there are many challenges you would face. It is really important that you learn how to manage money. This could be the key to your business success.
Here’s the most important thing in business
It’s okay when you face other challenges that are not related to money because you can easily solve them. But when you face money related problems, you need to learn how to manage your funds to keep your business moving.
Hopefully with this guide, you now know the exact things you need to look into for you to start managing money properly.
It’s a really good thing to know how to manage money as a business owner. Because without enough money and consistent cash flow, your business can fail.
As we’ve discussed, all you need to do is know the reasons why you can’t save money and then understand the solution to the problem. That’s all.
Now I’ve showed you all this, now is your turn to tell me – How do you save money in your business?