As you start your business, keep these tips in mind to help you manage your finances. They will make it easier for you to break even!
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Money-wise solo preneur
This book gives you the essential guide to easy-to-understand tips and strategies to achieve greater financial success.
This article was translated using AI technologies from our Spanish edition. Errors can occur as a result of this process.
In the early stages of a company's economy, the main concern of the entrepreneur is to be able to survive and find effective models for generating income. Despite the preparation we may have from an academic standpoint, there are certain areas where only experience can help do business.
Most importantly, you should always have realistic plans and expectations about the financial projections and times it will take your business to break even and then be profitable.
Next, we will give you some tips to help you avoid more than one disappointment with the company and better prepare for the reality of an SME:
Your financial plan must be realistic. Every company incurs more expenses than income in the first few months of operation, and the calculation of a three-month treasury can be inadequate. You need to think long term and avoid financial drowning in debt or debt at all costs. It considers bigger reserves to be able to invest in an extensive product catalog and manages the expectations in its sales time.
Terms of payment
Always pay attention to the terms of payment. In general, large companies misuse 30, 60, or 90 days of data to cancel an invoice. This can create big problems for a company that is just getting started. On the other hand, cooperation or public administration creates similar inconveniences, often exacerbated by bureaucracy.
Excessive ad spend
Every business that starts out needs to control its spending. Despite the fact that a lot of cash outflows are more than justified, it is necessary to have an order, not to abuse the lines of credit and not to end the reserves. While getting your brand out there is important, spending too much on advertising can be detrimental in the beginning. Efforts should be made to analyze costs and see when the return on investment will be realized.
Hence, it is recommended that, in your early days, you rely on more affordable means such as social networks and digital marketing tools in general. It is very important that you define your strategies well and define your return on investment.
Keeping accounts up to date is always beneficial to any business. In many cases, a slight miscalculation can throw finances out of whack and change the business plan. It is advisable to keep weekly balances so that you can have more control over your expenses and income.
Having criminal customers is a situation no entrepreneur wants to be in. You should always ask yourself if the customer is dissatisfied or if they really have financial problems. Given the disappointment with our product or service, it is recommended that you act quickly, offer a replacement, or provide a complementary service that will satisfy you and allow you to clear the debt. In the event of a bad financial situation, you should consider all legal options to settle outstanding accounts.