Who wouldn’t want to succeed at business? What would be the point of not reaching for the highest peak you and your business are able to climb? You don’t necessarily need to aim for the stars, but an atmospheric outlook isn’t going to harm your business – is it?
Now, consider what is important to your business. Is it the way you speak to customers or is it your brand? Ideally – every single aspect should be treated with importance. That is key to success in business.
However, there is no end to the discussion of what works, and what doesn’t, in the complex world of business. This can be talked about through the whole entire day. What needs to be focused on, however, is money. If your business isn’t making ends meet, or breaking even – it might not last long.
Every single aspect of running your business should be treated with importance and care – but money might just be the be all and end all of the everything business. That’s why it is so very important.
It can be difficult to start out in business already without focusing on money. You’re going to need cold, hard cash to start your business, though. From banks, to venture capitalists, there are plenty who would look to succeed on the back of your business through their investment in you. A good place to start is with your own savings – but make sure your personal life is secured, and you can afford to live before plowing your savings into your idea. If you’re running your own business, you might even have to go unpaid in the long term until a cash flow develops. If you’ve got a good network of friends and family, it’d be a good idea to consult them about borrowing money to follow your dreams, ensure the terms are laid out, and contracts are signed, though, so nothing bad arises. Forbes has a great case study as to how this can work out for you.
‘When Bill Skees, a former IT pro, needed funding to open his independent bookstore — Well Read New & Used Books in Hawthorne, N.J. — he asked his six siblings for three-year, 3.5% family loans. “At the time I was starting up in 2010, small-business bank loans were hard to get,” says Skees, who raised $124,000 from his family. He expects the money will be fully repaid by the end of 2014.’
If you’re in a partnership, monetary issues could dominate it. Arguments over salaries and financial issues can sink a business before it begins. If you’re disagreeing with your business partners over salaries, you won’t be going very far. Everyone needs to be on the same page before things can get moving. Take it from Entrepreneur Magazine:
“Discuss the expectations of the parties,” Steinberger says. “What type of personal overhead does each party have to have? Is each party willing to take less money out of the business to help it grow? From there, you can execute employment agreements, which provide for a base salary and allow for quarterly or semiannual distributions or commission income to be tied to performance.”
It’s very easy to take money from the company, especially when it’s run informally. This financial infidelity can scupper things. If you’re suspicious of your business partners, the effects can be devastating whether your thoughts are unfounded or not. Never accuse anyone of anything if you can’t establish something as this could not only result in the collapse of the business but a court case for yourself if it’s not true. It’s easily avoided though. Before you get into business with one another, mutual background checks can lead to open and honest discussions before a business is formed. Make sure to create checks and balances. Handle accounting well and responsible and make sure everything is recorded. Simple. If you are in a partnership, ensure that multiple signatures are required on cheques and credit cards – it’d be a good idea to set a credit limit on your business as you need to walk before you can run.
Of course, even if everything is going well, you have to factor other people into the equation. People are strange things and are unpredictable at the best of times, especially when it comes to money. So what happens when your customers choose not to pay you for their products? A keen eye on the transaction history between you and the faulty party might be able to stop this situation before this arises with a payment plan or in the worst case scenario, refusing to do business and canceling the relationship before they are heavily into a debt they cannot pay to you. That’s a lose-lose situation for everyone. There are plenty of ways to nip this issue in the bud, thankfully. Factoring may be a great idea if you lack the manpower or inclination to constantly chase customers. Factoring is the process of selling outstanding invoices or the accounts of customers unwilling or unable to pay to various companies who will chase up the debt. Truckers and haulage do this through trucking factoring to ensure that they are running as they deliver goods across the country. They can’t chase customers if they are in the cab on Route 66, so they look to factoring to simplify the entire process, and it’s worth thinking about.
Most important of all – keep a close eye on your money – records of your money can help you tell the future, and if not, they can give you a clear picture of the future of your business if not a tell-all story. It’s important to be in close contact with your accounting so you can see if tough times are ahead before laying out the big spend. There are plenty of tools to help you manage your business finances, but the best is a focused and organised mind.