Being an entrepreneur gives you the freedom to enjoy a more flexible work schedule and more control over the income you earn. You also have all the responsibility for generating revenue and paying bills. While financial mistakes are always part of the learning curve, making too many of them too soon can cost you your business. We hope the tips below will help you feel more financially savvy as you take on your exciting new role as an entrepreneur.
Make Sure You Have an Emergency Fund
Although no one could have planned for the enormous impact the coronavirus pandemic had on small businesses, all entrepreneurs should take this as a lesson to prepare themselves for anything. Having a sizable emergency fund can mean the difference between staying open during a crisis or shutting the company’s doors forever.
The amount you put into your emergency fund is entirely up to you. However, you should also create rules for yourself regarding what constitutes legitimate use of the funds. Discipline is a critical component of managing your finances as an entrepreneur. You need to teach yourself to think like a business person and not touch the money unless necessary.
Create a Business Budget
There is no way to avoid the need to create a budget for your new small business. Without one, you will have no idea where the money went and how much you spent in each expense category. If you have employees authorized to spend company funds, go over the budget with them, and ensure they’re on board with your decisions. Although you have no obligation to justify the budget as the business owner, a brief explanation can help your employees understand your reasoning.
Finding, interviewing, training, and onboarding employees takes significant time and resources, which means you want to repeat the process as little as possible. Doing your due diligence at the beginning of the hiring process and taking time to ensure a great match will save you the expense and frustration of constantly having to replace employees who weren’t a good fit.
Feel free to schedule an appointment with Ambition Funding Solutions to discuss more financial management tips for entrepreneurs.