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Willie Corbeil
Posted September 18, 2018 by Willie Corbeil in Financial
It is no surprise really that money management is up there with the biggest challenges a small business owner could ever face. According to the Small Business Administration, out of all small businesses, about one-third are not able to make it past the first two years and 50% of all small businesses fail within five years. Harsh but that’s the reality on the ground. As a small business owner, you should look to avoid money management pitfalls if you wish to keep the doors of your business open for years to come. Read on to find out 5 of the most critical mistakes to avoid.



1. Starting your business without a foundational business plan

For a business, whether big or small, its business plan is the foundation for its success. Your business plan will serve as a manual of some sort to structure your operations and keep tabs on your progress. At the appropriate time, your business plan will also serve to convince other influential parties that investing in your business is not without its benefits. A good business plan is one that tells the financial story of your business – its past, present and future. Try to set goals for projects you undertake especially during your formative years as it helps to keep you accountable.

2. Using one account for your business and personal stuff

You ought to understand that the minute you start earning money for services you provide, you become a small business owner. It does not matter what you actually do. What is important is that you keep tabs of every penny that comes in and leaves your business. You do not even have to explicitly set up a business account for starters. You may use a checking account for the clear purposes of keeping track of transactions related to your business. It will come in handy because later on when you expand and incorporate, you don’t want a tardy ledger that has your personal expenses messing up your business finances.

3. Deciding against taking on debt

You may have started your business from scratch with your own resources and that’s highly commendable but it is important to also know that in order to keep your business growing, you cannot rely solely on your resources. It may surprise you that poor cash flow management alone accounts for 82% of business failures. We understand that going into debt can be a scary prospect but you don’t have to go for a monumental sum when taking out a loan for your business. With a good budget, a loan can help you achieve your business goals and can serve as a concrete cash flow cushion for your business. Visit https://sunwisecapital.com/bad-credit-loans/ for the best small business loans from SunWise Capital for those with bad credit. We offer competitive interest rates with affordable loan payments designed to work with your cash flow. We have unsecured business loans and those that require a personal guarantee with the lowest interest rates.


4. Not being ready for rainy days

If you’ve ever been caught without an umbrella in a rainstorm, you’d understand how impactful a “downpour” would have on your business – your inventory, payments to suppliers and your customers. Your business may not have started raking in the profits yet but that shouldn’t stop you from starting a savings account. You could keep it very simple and put in something little every month. This way you would have something to lean on during emergencies.
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xiaoju xiaojun wrote at October 5, 2018
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chenlina20181006

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