Most entrepreneurs are big-picture people – smaller tasks such as finances (especially finances, actually) aren’t their real strength. Nonetheless, the job of this type of a professional, by its very nature, covers the basics of many roles simultaneously. You have to know the basics of everything, in addition to excelling at doing business – this is what being an entrepreneur means. As something incredibly tedious, financing takes a ton of dedication and focus, which is why we came up with a list of useful financial tips for entrepreneurs.
More work doesn’t equal profit
If you are working 80 or more hours per week in order to keep your business afloat, you’re not profitable, and if you want to remain afloat, you need to be profitable. In fact, even if you’re working over 40 hours per week, you might have a problem. Let me make it abundantly clear: exercising a ton of work, at the expense of your health and relationships is perfectly fine in business. This might seem cruel, but sacrifices do need to be made in the common goal of success. Taking this approach in the long term, however, is absolutely insane and not only useless but detrimental.
Sure, your company might be profitable when everyone is oozing sweat onto their laptops, but this won’t last forever – once the human element of exhaustion kicks in, your profitability is going to take a major turn towards the worst, as workload starts scaling back. Focus on leveling the field – aim for a steady workload for your team with occasional sprints to boost your margin and shake things up.
Procrastination equals loss
I’m not talking about the fact that the finances tend to drop as workplace procrastination grows; this is obvious. I’m talking about you. Sure, as a business owner, you probably won’t procrastinate on your typical daily tasks, but entrepreneurs are professionals who do like to put off boring, tedious tasks. Well, quite conveniently, tending to your company’s bookkeeping needs is one of the most unnervingly boring tasks in the world of business, yet it is absolutely vital that you tend to it promptly, diligently and responsibly.
If you continue putting off the accounting work, it won’t just blatantly go away, it will only grow. It is much better to invest a ton into a rock-solid professional accountant than try to save up by taking things into your own inexperienced, unmotivated hands.
Understanding the seasonal cash flow
Thinking about your profits in a linear manner is extremely basic – the fact that you might be earning as much as you are right now doesn’t mean that this isn’t prone to change. A prime example here is something called “seasonal cash flow”. Depending on the branch of an industry you’re in and on the tax season, there are patterns to be caught that can help you understand what to expect and when.
Usually, the spikes occur during tax season, followed by a slowing of conversions. Keep this in mind and start recording your cash flow history, as this will help you predict it in the future.
Put some of your company finances into outside investments and make sure that you do so towards multiple sources. If you are in the digital world, think about going crypto- If you’re frequently dealing internationally, Forex might be your best bet- If you want a solid, stable investment, think about investing in precious metals – these prices don’t fluctuate too much.
Making outside investments is always a smart move, as this will help you grow your money and the list of your contacts.
Staying within the scope of reason
You don’t need to create everything from scratch. Sure, in an ideal world, working on every aspect and detail of your business from the ground up would be absolutely perfect, but this is not only time-consuming, it is time-wasting; this might end up saving you some money at the end of the day, but it is nothing compared to the valuable time lost on dealing with every little detail. Time does equal money!
You need to realize that more work doesn’t necessarily mean more profit, although procrastination does equal financial loss. Make an effort to understand your seasonal cash flow, invest outside of your business as a precautionary means of additional finances and don’t overdo it with branching out!