5 Big Money Mistakes Small & Medium Business Owners Will Probably Regret
Many small and medium business owners have a hard time earning an optimum return on investment on their money.
They are often so busy with other aspects of running the company that they don’t take the time to focus on financial decisions, or worse yet, they make costly mistakes that could impact their bottom line for years to come.
Let’s take a look at some serious mistakes business owners often live to regret so that you can avoid them and keep your company on the right path.
#1 – Neglecting Financial Planning
It’s easy to be tempted into putting off financial planning when your business is doing well.
You believe that you have plenty of time to plan for the future, but making a mistake in this area can delay growth or even lead to bankruptcy, down the line.
Make sure you are keeping track of all incoming and outgoing Cash so that there is no question about how you are spending your funds.
One of the best things a small business owner can do is to seek out a Business minded CFO who is familiar with your industry and will be able to help you set up a Strategic plan that works for your company’s unique needs.
You should also have ongoing accountability discussions with this person so they can keep you updated on how your finances are performing, and make suggestions for changes that will help you achieve the big picture goals of your company.
#2 – Not Being Proactive About Securing Funding
When the going is good, it’s easy to put applying to creditors and investors off for a later day.
However, in actual fact it’s always best to seek funding when your business is faring well financially.
You want to be in a strong position to negotiate the best possible terms and finance rates, as this will save you significant money and stress further down the line.
If you leave it until later, when your company’s financial outlook is less rosy, you may not be able to obtain the funding you need at all, or you’ll be subjected to unfavorable terms.
A seasoned CFO should be able to help you prepare a strong case to present to potential lenders and investors.
It’s also good to arrange a line of credit in case you need ongoing funding in the future.
#3- Failing to Protect Your Assets
You need insurance to protect your assets. Whilst no-one likes to think about disaster striking, it’s crucial to be prepared.
Depending on what type of business you have and the industry in which it operates, there are all kinds of policies that can help keep your company’s assets secure.
Take some time to shop around and find a policy that has everything you need, and be sure to comb through it carefully before signing on the dotted line.
#4 – Lax Bookkeeping
You may not be a ‘numbers’ person and that’s fine, but you should still make sure that you keep your books up to date.
If you don’t know how your business is performing financially, it will be difficult for you to make good decisions about the future of the company.
Cloud bookkeeping software makes it extra easy to keep track of your company’s financials.
You can receive up-to-the minute reports on what you’re spending money on and how much cash is coming in, without having to do hours of number crunching yourself.
You can also easily upload receipts, invoices, and bills to make sure you never lose track of a transaction.
#5 – Not Seeking Expert Advice
It’s easy to think you know it all when it comes to your financial well being, but in reality no one is an expert at everything.
You should call upon the expertise of professionals like a seasoned CFO, who can help your company grow its Net Assets and move forward into the future with confidence.
Working closely with these professionals will also allow you to save time and money in terms of reaching your goals.
Final Thoughts:
There are many different ways to manage the money in your business, but one of the most important things you can do is find a Seasoned CFO who has expertise in working with businesses like yours.
Take advantage of their knowledge and experience so they can help set your business up for long term financial success.
Action Steps:
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