Entrepreneurship is all about managing a business. And a business runs on a fixed budget. Managing the finances is one of the major tasks in running a business and to be successful every new entrepreneur must know a few business essentials listed below.
- Separate your personal and business expenses
This is very important because if your personal and business expenses get mixed up then it will become impossible for you to calculate how much input the business needs and how much profit it is generating.
- Maintain records
Even the minutest detail should be recorded. All the receipts should be kept safely. These are the sole proofs of your transactions. We think only large expenses should be counted in but that would give you incorrect results later on. All major and minor transactions, expenses should meticulously recorded and maintained. These will later come handy while filing for taxes and also maintain the transparency in the business.
Do not get fooled by your suppliers. Always haggle with them for the best possible deal. Remember they too are entrepreneurs and no one ever runs a business on loss. Be aware of the prices of the commodities that you buy. Don’t hesitate to inquire. As long as you are polite there is no harm in it. You have the right to know.
- Never settle for the first deal.
Always shop around. Get up and down at least a dozen shops before finalizing a deal because who knows where you might find the best deal.
- Cut costs
Buy smart. When starting out for the first time, buy reused good- be it electronics or even furniture. Minimize inputs as much as you can.
- Try freelancing
Instead of hiring extra employees, freelance as many services as you can, because not only is it cheaper but it also gets rid of the additional expenses of taxes, payroll fees, sourcing, hiring and training.
- You don’t need an office!
Start working from your garage or basement or a truck or cart. No need to buy an office first because it is unnecessary expense. Once you make enough profits you can easily rent out a place.
Start networking. Volunteer at local events. Socialize with neighbours. It is equivalent to free marketing! Start advertising beforehand. There is no harm in doing that.
- Don’t shy away from asking help
Even big entrepreneurs go to financial experts to seek help. Ask opinions of relatives and friends. Take an accountant’s or bookkeeper’s help if needed. Join any business association.
- Get insured
This may seem like an unnecessary step to young entrepreneurs. But it is better to be safe than sorry later.