5 Financial Blunders that a Lot of New Business Owners Make

If you’ve recently started a business your biggest fear is likely to be not having sufficient funds for it to operate.  Hopefully, we can help you avoid this doomsday scenario by highlighting 5 financial blunders that a lot of new business owners make so that you don’t.

Making Big Purchases

When you choose to set up your company, you may be very tempted to go out there and buy the latest tech. You may also want to invest in a very comfortable office space and hire team members with the best possible credentials. Choose to only spend the money that you have on things that are critical for your operation to run. If you can be as lean as possible with your business and your personal life until your business has grown enough, then this will help you to sustain your efforts and have a bit of money left over to save too.

Neglecting Insurance

Your company must be fully insured and protected. Having the right kind of business insurance helps to eliminate a lot of financial risk, especially when it comes to unforeseen events. The one problem with this is that a lot of small company owners cancel their coverage before they have a new policy in place, or they do not end up choosing a policy that is suitable for their needs. If you want to avoid this, then be sure to talk with your provider so you can make sure that you are finding something that suits you.

Mixing your Accounts

As soon as you have your company set up, you then have to open a bank account that can be specifically catered to your company. You will also want to apply for a credit card as this will make it easier for you to track your company expenses. That being said, it is so important that you never use your personal accounts or your money for business transactions. The same applies vice versa too. If you do not split your finances and do not monitor your cash flow, this will cause you many issues and you may find that it becomes much harder for you to file taxes and measure your profit. If you want your company to be successful, it is wise for you to invest in credit card processing as well.

Credit Card Debt

You always have to make sure that you do not spend money that you don’t have. Using a credit card is a very common practice and although they can be convenient to use, they can put you at risk of a lot of debt if you are not careful. This is especially the case if you do not monitor your debt correctly.

Not Having Savings

Savings are the best way for you to keep your company afloat when times are hard. If you do not have savings, then this is another monumental mistake, and you may find that it haunts you quite a lot in the future. When things take a turn, having that safety net is imperative to your company’s success.

Want to enter the business world without pitfalls?

If you want to enter the world of business and avoid all the potential pitfalls you can, we would recommend you buy a franchise this way; you can trade under a trusted brand name and follow a proven business model of success, allowing you to get customers through the door as soon as possible. If you want to search for franchises, visit a website such as Franchiseek South Africa today to find the best franchises in South Africa.

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