4 Money Management Tips for First Time Entrepreneurs
By: David Osborne
David Osborne is a financial advisor and founder of Osborne Advisors Wealth Management.
There’s nothing more exciting (and terrifying!) than being your own boss. As an entrepreneur, you know all about the grind. This isn’t a job that’s served on a silver platter.
One of the most important parts of being a successful entrepreneur is money management. Though it may seem overly complicated at first, money management can be made simple.
Keep reading to learn about four of the best money management tips for first time entrepreneurs.
Spend Wisely
What good is a new business without new computers and fancy office furniture? While we all want the glitz and glam, these things will come in due time. As an entrepreneur, you need to live and sleep by the word frugal.
Avoid impulse buys or buying items that don’t benefit your bottom line. And before paying someone to do something you can do, make sure the cost offers a reasonable return on investment.
Start Small and Grow Slowly
Now that you’re a boss, the next step is to grow your team, right? Not so fast. As an entrepreneur, it’s best to start lean and stay small. Hire must-have positions and don’t rush to getting bigger quickly.
While it can be tempting to hire, especially when workload or product demand picks up, resist the urge! When times get a little hectic, hunker down, stay focused, and find ways to improve your processes and output.
Don’t Lose Focus of Your Cash Flow
Cash is, and will always be, king. As an entrepreneur, it’s your job to keep a healthy amount of cash in the bank. You’re also in charge of coming up with strategies to maintain a healthy profit to support cash flow.
Having money in the bank is endlessly beneficial. You have funds to fall back onto in a time of crisis. Cash flow also makes it much easier to get approved for business loans in the future. The flexibility to borrow, which comes from cash flow, is key for short- and long-term success.
Maintain Your Personal Finances
Don’t lose sight of your personal finances. Owning a business makes it even more important to keep your money in check. This is especially true when it comes time to borrow.
Because your business is new, it doesn’t have a credit score or history for lenders to consider. In this instance, it all falls back on your personal financial health.
As an entrepreneur, you’ll want to keep tabs on:
– Your personal savings and checking accounts
– Your credit score
– Frivolous spending outside of the business
Practicing smart money management in your personal life makes it much easier to apply those same behaviors when it comes to your business.
Final Thoughts
As an entrepreneur, nothing comes easy, especially money management. With these four tips, you can set a steady foundation for growing your brand and your profit margins.
