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  #1 (permalink)  
Old 03-26-2017, 06:08 AM
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4 Common Financial Mistakes Every Small Business Owner Should Avoid

Are you making any of these? Are you going to correct them is the real question.

Have a look at the following blog post.

Quote:
Every entrepreneur and business owner will make a few financial mistakes during their journey. Those who arenít savvy in accounting often overlook the need to brush up on their financial IQ. Truth is, these little financial errors can lead to some serious cash flow problems if you arenít careful.

Here are four financial mistakes you can easily avoid so you can protect your bottom line.
Continued at: http://www.bloggingtips.com/2017/03/...s-owner-avoid/
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Old 03-26-2017, 06:53 AM
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I am only making 1 mistake out of the 4, so 25% isn't that bad.

The mistake i am making is - Spending Too Much Time on Non-Cash-Generating Activities

The thing is they may be non cash generating at the time but in the future it can turn into actual cash.

For example helping out a customer beyond the service they are paying and not charging them for it - may in the future turn into extra paid business.
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Old 05-30-2017, 05:00 PM
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I got quickbooks online and it really helps to separate the invoices. I would recommend it to anyone because it allows you to link up all of your accounts.
 
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Old 06-07-2017, 05:14 AM
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One thing I definitely agree with you i.e. staying lean. Nowadays, if one thing works for your business, there will be 10 more people who can become your potential competitor. Right now, too much competition also affects sales.
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Old 06-10-2017, 06:10 PM
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Recording your expenses is very important to forecast your monthly bill. Also create a cash flow system where in you can check how much available for your cash to allocate those expense. A month forecast of transaction much better so you can get a certain percentage how much is your expenditure in a month.

And by the way also don't forget to calculate your expense ratio:
Expense ratio= Expense / Net Sales X (100) . For that, you will get a certain percentage which will be vital in forecasting your monthly expense
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Last edited by J. H. Rasmussen; 06-11-2017 at 05:14 AM. Reason: Merged 2 posts.
 
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Old 06-11-2017, 10:28 AM
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Quote:
Originally Posted by inventive View Post
I am only making 1 mistake out of the 4, so 25% isn't that bad.

The mistake i am making is - Spending Too Much Time on Non-Cash-Generating Activities

The thing is they may be non cash generating at the time but in the future it can turn into actual cash.

For example helping out a customer beyond the service they are paying and not charging them for it - may in the future turn into extra paid business.
Currently i am making mistake in niche selection i have gone into such niche which no one searches.
 
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Old 06-11-2017, 09:58 PM
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Originally Posted by angad View Post
Currently i am making mistake in niche selection i have gone into such niche which no one searches.
That's a strategic mistake, not a financial one.

A critical financial mistake which small businesses make is not taking advances. I myself did it when I started out. It can be a nightmare to chase and recover payments once the job is done & small businesses have no option but to write it off. It just adds to the losses.
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Old 06-13-2017, 02:06 AM
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Really a nice and informative piece!
I cannot agree more with your point that is Spending Too Much Time on Non-Cash-Generating Activities can hurt business!
 
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Old 07-03-2017, 07:02 AM
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Thumbs up Be a lean entrepreneur till you reach a certain comfortable level

There was a saying I read somewhere and it is true as well.

You need to sell your products even before you procure your raw materials to make it.
That means you need to build your customers well in advance even before you open your business. You need to be a financial hawk. You do not spend unless your earn your first profit. You need to curb your urge to spend. It is difficult.

This is very important if your bootstrapping your startup from your own personal savings. You need to be lean all the time till you have reached a certain comfortable cash flow and Opex flow.

Things might be slightly different if you are privately funded by investors. But even there, there are no less headaches. You are always on the run to make profits.
 
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Old 07-03-2017, 08:19 AM
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Spending Too Much Time on Non-Cash-Generating Activities is a major mistake. I define this as activities that have no projection of any returns ever. (Some non-cash- generating activities can generate cash in the long term)

I would add also, spending too much time on activities that generate lesser cash is also a big mistake. Example: If you have a home remodeling business, do you spend time fixing the houses yourself or is your time best spent closing more deals and lining up sub contractors to do the job? In the short term, it may seem like you are making money doing the remodeling business yourself but you are actually better off spending your time developing the business. How you distribute your time within your business can make or break you.
 
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Old 07-05-2017, 01:48 AM
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I've noticed a lot of business owners spend too much time on non cash generating activities, thinking it saves them money. But in reality is costs money because it's hours away from cash generating activities. This is one of those instances where outsourcing the job and paying a virtual assistant to do the work is so much cheaper than doing it yourself.
 
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Old 07-14-2017, 08:38 AM
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Late payments

I generally suggest giving your clients no longer than 14 days to pay an invoice. If youíre providing quality goods and services they should have no problem paying you within this time window.
 
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Old 07-15-2017, 12:52 AM
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They're right, in fact, I truly hate late payments. That will not only discredit you, but also show that you do not focus on your business. And no one wants to work for a business like that
 
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Old 07-18-2017, 03:25 AM
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Failing to Separate Business Funds with Personal Funds

This is probably the most common mistake novice business owners do. I've seen businesses fall apart because the owners didn't have the brains to realise what is theirs and what's not.
People consider their business as part of themselves. Well it's not. It's a separate entity that feeds you. If this entity is not "healthy", then you wont be "healthy" too.
Calculate what are the needs of your business every month and use whats left of it for your personal needs. If there's a time where nothing is left, it's YOU who should be hungry, NOT your business!
 
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Old 08-11-2017, 06:28 AM
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Late Payment issue is not such an issue on which we have full control. Other three are mandatory for success of every business like we should majorly focus on cash generating activities and maintaining an Emergency Fund.
 
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Old 08-11-2017, 06:03 PM
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I think I have made all the mistakes at different points in my life but I guess separating your business from your 'self' would be a great idea. Being lean in terms of expediture is also very important
 
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Old 08-12-2017, 02:19 AM
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For a businessman employees are it's strength. Hiring right employee at right time will do the most job.
 
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Old 08-14-2017, 09:49 AM
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Great post !!
But, how about salary for employees ( I think employees is the most important of every company)
 
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Old 09-10-2017, 02:46 PM
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The biggest mistake ive seen is small businesses over spend on the unnnecessaries. As a small business every dollar spent better have a necessary purpose. Nothing worse than being short on cash in time of business need because you spent that cash on a new decorative floor rug. Soooo many friends who starteed a biz had made this deadly mistake.
 
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Old 09-19-2017, 06:55 AM
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I have been a victim of some of those mistakes. Very painful.
 
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