Did you know that every 100 publicly-traded companies in our country, 75 still have their doors open after the first year? To not be part of the statistic of the 25 companies that close soon in the first months of operation, it is necessary to take care of the financial management of your business. I know that the lack of control in the cash flow is one of the main reasons for the closing of the companies. Some mistakes, such as blending personal finances with legal ones, being dreamy beyond normal, among others, can undermine small business management. So, in order not to let you fall into these and other pitfalls, here I've listed you with 5 actions that can ruin your cash flow!
Do not do daily flow monitoringUsually, entrepreneurs usually make cash flow monthly. But I point out that you do this control every day, since that way you will know how much you are spending and the amount you will have to save in the future so as not to hinder the flow at the end of the month.
Mix personal accounts with businessOne of the biggest mistakes small businesses make is confusing their private accounts with business accounts - I've seen it happen several times! To escape this trap, the solution is to set a monthly amount that you can withdraw from the account, as a kind of salary. If finances are short at the beginning of the business, try at least for the first three months not to mess with the cashier.
Spend money that has not yet entered the cashierDid you receive a pre-dated check from here a month or did you sell in installments three times? Do not spend the amount that has not even entered the box yet! This will get the flow out of control, and you may get lost amid so much financial disorganization. So spend only what you have received to make planning more realistic.
Do not personally control your business accountsMany entrepreneurs end up leaving financial issues to their accountant. And this is a mistake that must be avoided. Ideally, you closely follow the company's routine, even in cases where someone already exists for the role. If you can not be in the company every day, try to be there at least twice a week. Often a small problem can become a headache due to carelessness with the cash flow. Remember that it's your business, and no one wants to take care of it any more than you do!.
Escape from realityWrong data, unrealistic estimates, among other issues that run away from reality can bring many financial problems in the future for the company. Be as realistic as you can in your predictions, not to take a step higher than what you get. The tip is to be both pessimistic and optimistic. So you make things happen instead of waiting for miracles!
How is the financial health of your company? Have you ever committed any of these mistakes? Let your experience, it may be useful to other readers! And be sure to read my article on how to do your financial planning!
Small Business Management: 5 Actions That Can Ruin Your Cash Flow
4/ 5by Bobby Gray