Starting a small or medium business is not an easy task. Undertaking involves many details and cares needed all the pieces of that puzzle called join business and harmoniously coordinated to achieve the objective is to generate profits dreamed that these are plentiful for the pleasure of their owners.
Others, however, have the dream in their minds and are released to undertake the adventure with the sole purpose of fighting to achieve.
But they plan to work tirelessly mending stockings and addressing unforeseen errors all the time. However, irrespective of your style to take, today I want to talk about what I call the 7 sins that can lead to a financial hell. And that’s the foundation of any business is its finances.
Cash flow is what can kill or keep your business alive and this is something we must always keep in mind to avoid that our dream is annihilated.
1. Indiscriminately use of credit card
Your credit card can be a great tool to support the operation of your business. But it must be paid on time to avoid interest charges or costly service charges you can eat your profits.
2. Not paying your loans on time
If you use leverage by credit, you must ensure that your installments are made in disciplined corresponding dates. Failure to do so may generate blackberries, interests and demands extreme cases that can damage your credit reference for future operations.
3. Monthly spending budget
Not respecting a budget of your business expenses and responsibly limit order the monthly expenses of the company may lead to financial turmoil and can have serious consequences. To avoid this you can see in an item planning for emergency expenses or miscellaneous expenses will also be limited.
Having accounts receivable does not mean that cash already in your checking account. So the money you will spend your time only income before it disarranges your monthly budget expenditures with consequent negative effects.
5. Not pay your taxes
In to full the tax issue has always been controversial for entrepreneurs for many reasons. If it is fair, if it is not, that if the government does not produce, that if they invest evil, etc. However, not paying your taxes on time and fully sooner or later you may represent fines, surcharges and to severe penalties which may involve the temporary or permanent closure of your business.
6. Granting credits indiscriminately
Sell to credit can be positive, but give credits indiscriminately may be just an illusion that makes you think you’re doing things right. To provide credit you must have good liquidity and a collection strategy that allows you to recover your money and maintain the financial strength of your company.
7. Mix personal finances with business
Clutter is always fatal. And in that vein, mix the money from your pocket which is operating the company can lead to chaos especially if they associated with someone else. So if you made any of these 7 deadly sins, there’s still time to repent and seek redemption. You can find the gate of heaven if you just have in mind the importance of having controls in order, discipline and financially constant education.
Any other sin you have committed and which did not mention in this post?