I don’t think there is an entrepreneur who starts a business and hopes it will fail in a few months. But cruel reality had shown us that around 50 percent of businesses fail in the first five years. On the other hand, we also have examples of the businesses that have experienced ten years of existence and are still going. All these successful businesses are owned by the businessmen who have all the habits that smart entrepreneur must have.
Not very surprising, but these habits, of course, have to do with money and your handling of it. Your business will depend on these habits. Unfortunately, these habits are not necessarily learned early because in school they don’t teach kids how to use the money properly, and that becomes a problem when we become adults.
It has become obvious that you are practicing the wrong money habits when your turnover and sales are going pretty well, but finances are not really as you want them to be. Even if you have been doing this your whole life (or at least since you started your business), it is not too late for you to learn the right ones and finally get the success you wanted. Here are the wrong money habits and what to do to eradicate them:
- Not saving
Well, this habit should just be common sense because the most basic form of increasing your money is saving. Unfortunately, many business owners are not doing this for some reason, and not just business owners, but people in general. That can be seen in the information that 50 percent of the Americans save less than 5 percent of their income. If you are a business owner don’t even think about not saving, sometimes it can really come in handy and help you out.
- Not keeping yourself on a “salary”
Although you are a business owner, you really should not treat all the income as your personal profit. By income, I mean the money that is left when you pay your capital expenses and employees. It would be healthy for your business to have a regular amount of money that you will be taking home at certain intervals.
- Not diversifying your business’s income stream
Recent research showed that average millionaire has at least seven streams of income. Although the focus is one of the most important parts of the success in business, very large number of business owners misunderstood this and thought of focus as of running a solo business in their way. Don’t mix focus with not using the opportunity. You will most probably be able to be diverse within your area of expertise in the way you offer some service or good, or even offer something new but similar to that. Diversifying is the most powerful way to get a large market share and afterward raise your income. Just open your eyes and get rid of the “focus myth,” open your eyes, start observing and eventually you will see many opportunities that could help your business.
- Not maximizing tax deductions and write-offs
You must be aware that there are some legal avenues for tax relief and deductions available. It is unfair not to use them. Sadly, a huge number of people who are running small businesses are not aware o this, and think that tax planning is the way to make the taxes work for you. But this is legal and not that complex to use, and it reduces your taxes considerably. To start using this, you will probably have to contact some tax professional.
- Not taking steps to reduce your credit card balances and debt
Using credit cards when running a business often comes with risks. So it won’t really be enough just to get one, you should learn how to use it properly. As soon as you are able, pay off your credit card debts and try avoiding using them, because you will also avoid the high-interest rate. If you can’t, don’t pay off everything right away, just start by paying the smallest one and be consistent.
- Not caring for “little money”
If you are consumer good entrepreneur, you’ve probably had to make some sells that happened to be just above the dollar, and you don’t really look at that as money, right? But at the end of the day when you count it, it turns out to be a pretty sum. People need to learn to aggregate the small sums that will eventually make big sums. This goes another way around also if you have recklessly spent smaller sums, you will end up losing a large amount of money in the long run, and that will hurt your business down the road very much.