The job of an entrepreneur isn’t easily defined. Alongside a burning passion to disrupt the
industry, an entrepreneur is a risk taker that has the backbone of a manager, the face of a
customer service representative and the mind of a sales strategist. However, one of the
most important roles of an entrepreneur is grounded in the ability to possess good money
management skills.
If you want to turn your venture into a success story, a profitable financial structure
should go hand-in- hand with your business plan. Here are 5 financial tips to bring with
you into the New Year.
1. Negotiation is Key
Negotiating prices and discounts with vendors, partners and suppliers where business
funds are tight could help you save a ton of cash. Purchasing terms are rarely set in stone
if you’re willing to bargain, and you’d be surprised at what your venture can get (and
save) through the power of asking for it.
2. Understand Seasonal Cash Flow
Thanks to slower months and seasonal spikes, almost every business suffers from a lack
of consistent cash flow at some point during the year. If you want to persevere through
slower months, ensure that you have a solid 3-4 months of savings for cushion to prevent
damaging your budget.
3. Use Your Credit Effectively
Don’t mix personal and business spending. If you haven’t already opened up a savings
account or a line of credit for your venture and you frequently catch yourself mixing up
these two pools of cash, it might be time to speak with someone at your financial
institution. Take advantage of what is available to you by educating yourself on what
kind of credit you need, whether it be a long-term loan or revolving credit.
4. Reduce Your Expenses
Wherever you see potential overspending in your budget, from employee contracts to
suppliers, cut it back. It’s essential that you work with the waves of your company’s
financial volume, through better or worse. Make adjustments to your budget and consider
all revenues and expenses when it comes to things like interest rate spikes and any
changes in economy.
5. Spend Time Accounting
Even the smallest business owners need to make big financial decisions. If you’re not
familiar with your venture’s cash flow, book an appointment with a financial advisor or
take an online accounting course to learn how the backend finances of your business works.
Potential financial challenges could be deterred if you can better understand the
roots of your venture’s money.
Sarah Amormino is poet and freelance writer based in Vancouver’s Lower Mainland area. Her written work has appeared in The Toronto Guardian, Simon Fraser University’s 2017 Emerge Anthology, and multiple independent art publications.