Financial Approach To A New Business

One of the most challenging aspects of a business is during the startup phase. More so, the major businesses that fail normally do so at startup phase. This is why business owners need to be careful of their activities during the initial phase of their business. Just like it is popularly said; "the starting goes a long way to determine how the end will be". One area that the challenges normally manifest is in the area of finance.

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There are what to do and what not to do when it comes to finance.

Appropriate Financial Record

One thing to guide your income and expenditures is when you have a proper documentation for it. This will allow you to know when your expenses have gone beyond your income and when that happens, you are already running into losses. If you do not document your expenses, you will not be able to know exactly your profit and losses.

For someone that cannot keep adequate records during the infancy stage of his business, how will he keep it when the business matures? - That's if the business will mature well. It does not cost much to keep records, rather it saves you the stress of reconciling your accounts when either profit or loss sets in. Okat let us look at another point.

Giving it a business approach

It is worthy to note that your business (even though you may be the owner) is very different from your personal life. It takes a high level of business maturity to be able to separate both your emotions and your personal life from your business. Many things may appeal to your senses but if it is not professional, then for the sake of your business, you should not bring it into business.

The truth is; your business will only deliver to your when you treat it like business. You should understand that the monies meant for your business should be used for your business. Imagine someone whose business is worth bearly 6 digit living like a CEO of a multi-million business, it will not be long and he will go bankrupt.

A time may come when sentiments will want to set in you business as a result of patronage from either family or friends. At that point, you should not let this to compromise your sense of professionalism in business. You should make your family and friends to understand that your business is business and they should support you, not bring down the business.

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A friend of mine once shared how his close friends where part of what challenged his business at the startup phase. They will buy on credit and instead of paying when due, they will pay instalmentally and this almost crashed his business until he learnt how not to mix relationship with business. When you take your business serious, then growth will be inevitable.

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