One of the reasons behind the failure of most business start ups is poor money management skills among entrepreneurs. To avoid making such mistakes we have prepared six money management tips for you.
1. Watch your Expenditure
Be careful how you spend money. You can for instance outsource services or hire part time employees instead of employing staff on full time basis. You can also run your business from home during the early months of operations.
2. Draw a Financial Plan
It is important to have a financial plan outlining the expected growth of your business. Include your expected expenditure, investment, sales and profits. This will help you determine whether your business is on the right path.
3. Involve a Professional
Seek assistance from professionals like accountants, auditors and financial advisors. They will help you draw a financial plan, offer advice on areas you need to improve on and can raise a red flag in the case that they see any warning signs in your business.
4. Save for the Future
Like life, business has both its highs and lows. One day you could be making huge profits and the next extreme losses. The performance of your business can be affected by very many internal and external forces, such as bad weather, conflict, economic recession or labour laws. It is crucial to put aside money for future.
5. Include your Salary
Most entrepreneurs would happily pay their employees, but do not bother to pay themselves. Draw your salary and that of other co-founders; after all, you can’t work for free forever. In the long run if your business cannot meet your salary expectations then you might have to review the viability of that business.
6. Be Realistic
Whereas it is okay to dream big, be realistic with your growth projections, revenue targets and price of services and products. For instance, do not assume you will make millions in profits in the first year just because your products are unique. Set both long and short term achievable goals.
mali alianda
April 23, 2011
They also need to invest in up-scaling their business management skills.
Reason: As business experience expands and grows in the key aspects such as sales, revenue and profits, the entrepreneur must match the growth with business management skills necessary to handle the attendant challenges before they result into serious risk factors that may lead to business closure.
M.MUJAYA
April 27, 2011
The tips are applicable mostly to the big entrepreneurs who enjoy economies of scale. For better advice there must be tips on how to get those finances and hence how to grow to have a succesful bussiness.
Paa Kwesi Ntow (MD-NG Tech LTD)
May 8, 2011
These are wonderful Tips we need such most often.
Lutengano Haonga
May 10, 2011
These are the best tips most needed if respected for business growth and sustainability, it should be extended to rural women.
nziku oscar t
May 12, 2011
The tips are applicable mostly to the small and big entrepreneurs who are engaging in business. For better advice there must be tips on how to get those finances and hence how to grow the small entrepreneurs to have a succesful bussiness.
Dustan Mziwanda
May 23, 2011
I love the tips, they are good and educative. They give a direction to those who start and own business.
Dustan Mziwanda
May 23, 2011
They are good tips.
cosmas mogasa
May 25, 2011
Thanks, these are the best tips to start a business and ensure its positive growth.
LEONE
May 27, 2011
This Africa Report is very interesting and educative.
Thanks and keep it up
LEONE
TANZANIA
nabula
June 3, 2011
The Africa Report is so Educative-Keep it up.
Harriet
October 10, 2011
Excellent tips, we need more of this.
Ken Heatherington
November 8, 2011
Thanks for this – this info will be very useful for me in the future.
K. Oski
December 25, 2011
Awesome Awesome Awesome! Good initiative.