Our next article on management as an entrepreneur is a bit trickier than the last one on Time Management. Money matters tend to be very tough to manage if you’re not used to it and it comes with A LOT of temptations that will make you do one small thing to improperly mismanage it… then another… then another until, one day, it will just all snowball and you’ll find yourself in a horrible financial bind making you lose your business or, worse, make you fall into a lifetime of debt. This is even truer for small businesses that are incorporated where a financial bind can possibly start affecting your personal savings, possessions, and lifestyle. It’s definitely a very tough thing to manage but also something that MUST be learned and done.
Oddly enough, one of the common mistakes for entrepreneurs, especially new ones, is that they aren’t able to separate their businesses finances from their personal finances. They make both intertwine which, later on, becomes very tangled up and messy. You have to learn to draw the line between both and make sure they never crossover with each other. There have been so many stories of businesses going bankrupt because they used business funds for their own personal expenses. While some may be able to pull it off, you have to understand that this is a very dangerous thing to do especially when you’ve just started and your business finances aren’t stable yet. Not only is this important for the proper allotment of funds but, if you are able to draw this line, you’ll also be able to effectively assess whether the business is doing well or not because you know exactly where your profits are going or where your losses are coming from.
This personal/business distinction of finances is one of the core things that you should know and keep in mind. We advise that you take the steps necessary to start this as early as possible to ensure that things flow smoother for your business.
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