Running your own business means first and foremost to look after the money. Being an entrepreneur is hard work, make sure you enjoy what you do, but do not forget the nuts and bolds of your business, money!
Millions of turnover are a waste of time, if you can not show a profit at the end of the year!
Looking after your money means getting paid, and on-time. Also make sure you are not relying on one or two customers alone for all your turnover, no single customer should be more then 10% of your total outstanding funds. If you have a larger number of clients then it is easier to live with one or two late payment customers. You can even decide to stop trading with these clients, after all, are you a bank? So credit control is one of those vital, but often hated jobs in a business, but of enormous importance. You can do this yourself, or outsource it for a fee. Have a look at your bank balance, and now add all the money that is overdue from clients. See what I mean!
However, looking after your money also means not spending money or at least keeping it to a minimum. Just remember what you need is not only money or better, liquidity in the bank, but also a positive cash-flow. Both of these are important factors in your businesses survival. If you don’t know how to plan and forecast your cash-flow, learn it. See your accountant and have him / her show you how it’s done, it is as powerful as it is easy. You will learn in a couple of hours where your bottle-necks are and what you can do about them. Try and keep your fixed cost down and use outsourcing techniques if possible. Use on-demand SaaS – Software as a Service technology to keep your IT cost to a minimum and at the same time outsource some IT functions, like security and data back-up.
All this will help you to keep your feed on the ground, focus on the important issues, and never to get complacent. Nothing is more fun then a good running business, that makes money every month. That means not only sanity, but success.
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