Financial education is one of the most limping legs among entrepreneurs anywhere in the world. It is, in fact, one of the sections that usually occupy fewer pages in business plans. But not doing your homework leads to more bankruptcies than you can imagine.
To improve we must always look at the one who does well, and that is why I wanted to extract 7 positive habits that retailers do successfully, according to a study published in early 2017 by one of the great US statistical agencies:
1. Make forecasts at the beginning of each month
Every month, businesses have to make a series of blind expenses without knowing how much money they will enter. Or what is the same, traders have to imagine how much money is going to enter their cash register and, consequently, they must spend an equal amount of money on buying new products to replenish the stock. If these forecasts fall short positively (we sell more than planned) or negatively (we sell less than expected), we will lose money.
For these reasons, retailers should make the effort to make forecasts and compare their imaginary data with the real at the end of the month. This exercise makes each time we are better predictors and loses the least possible money in the future.
2. Periodically review finances
Whether it is for fear of looking at accounts or for sheer sloppiness, the vast majority of retailers do not look at accounts every few minutes. They live up to date with predictions made without data. How the heck do they want to buy enough stock on time if they do not know the sales trend depending on the seasons, the time of the month, etc.? It is impossible to buy well or distribute the efforts throughout the day, week, month, quarter and year if we do not know what will come next based on the financial history of our business.
And this is how we find stores full of old stock that will never get rid of buying too much. As we also find stores that, in the midst of Christmas shopping, lose money every time a customer asks about such a product and they have to apologise because they do not have stock.
3. Have a simple management program
It is clear that order in a trade can not be maintained with the power of memory. You need software that helps you keep accounts. But the traders surveyed not only have a program, but it is also simple.
This is also curious because taking into account that there is a large percentage of businesses without a management program (in Spain we call TPV to dry), those who decide to finally have one end up complaining about its complexity. And there is a big difference between having or not having, but of course, the greater the difference between a complex TPV and a simple one. So much so that many retailers who, with good intentions, decided to put their finances together by buying a brand new POS, they finally abandoned it. Apparently, they could not afford the cost in the form of consumption of time, energy and humour of dogs that generally produced him that mastodóntico and innumerable software.
Simple alternatives are kicked. From manufacturing yourself a POS with a simple Excel to different online POS terminals that are lately becoming fashionable, or other free code that can be found with a simple Google search. There is software, really simple, that make the life of the merchant to an unsuspected level.
4. Save money to pay taxes
Only a small part of the traders radically separate the money they can revert from tax money. Keeping that money in reserve is vital in order to avoid the tax punishment that countless merchants receive for using that money for other matters thinking that “they would get it elsewhere.”
We can enter into discussions about the possible theft of taxes, but that is what there is and one should be aware of it. In short, the money for taxes is not touched.
5. Reduce debts until they disappear
Debt in the initial or growth phases of a project is normal. However, there are more entrepreneurs than you think will get even further indebted to repay old loans.
The payment and completion of these species of invisible chains are the obsession of good entrepreneurs. Reducing debt along with paying taxes is sacred to marketers who run their business well.
6. They pay themselves a fixed salary
If you know small independent entrepreneurs you will have noticed that when they need some change, they open the box and collect money. Well, according to the study, the most successful traders do not, but are assigned a fixed salary and period. They do not have a higher salary if the benefits have been greater and they perfectly separate their salary from the profits of the company.
In this way, they can not only count these benefits but at the end of the quarter, they can decide what to do with that money. For example, they can make expansion plans, save for the flimsiest months or invest in advertising in an orderly and unsurprising manner.
7. Make the most of the tax benefits
That successful entrepreneurs pay taxes does not mean that they pay a penny more than their share. That’s why they are always aware and hire good agencies that can save them.
From the business structure (autonomous, SL, SA, cooperative, community of goods) to deductions for purchases or contracts. Companies that do this care about this issue and do their best to pay less.