Why Financial Savvy is Especially Important for New Businesses
That’s a legitimate question. It can feel a bit silly to put a whole bookkeeper/cloud system in place when there’s a zero in the income column.
I liken it to a 7-year-old baseball player. I remember spending many hours on the baseball field while my younger brother practiced and played games. Sometimes there was action, usually there wasn’t. If someone got a hit, which was rare the errors in the field meant it was often a “home run”. I know nothing about baseball, but those early years were bad, really bad.
Did the coaches think, “these kids are a hot mess, we’ll just play on our iPhones while they practice.” No. They poured every bit of knowledge, tactics and guidance they had into those squirrely boys. Why? There’s no other way to build good baseball players.
Likewise, there’s no other way to build financially savvy entrepreneurs. You start at the beginning, your first time at bat. You figure out the basics and build from there. What can that look like with a new business:
- Open a business account and fund it with a specified amount you’re contributing to the business each month.
- Keep your business and personal expenditures separate. If it’s a business expense, it comes out of the business account.
- Categorize business expenses, web services, rent, advertising, office supplies, etc. It’s important to know not only how much you spend but what you spend it on.
- Figure out how much it costs you to make each product or offer each service. When the time comes, and it soon will, you can connect the dots between the expenditures and income and see which offers are most profitable for you. This is KEY. So many businesses skip this step and end up spending time and money offering things that don’t increase the bottom line.
You can do all this with a spreadsheet – or if spreadsheets make you nauseous, a Word document – or if no Word document (for now) old-fashioned paper.
Don’t wait until you’re trying out for the college team until you try to gain some skills. That’s brutal and you’re likely to fail. Give your 7-year-old self, your new-business self, the training you need to succeed. Invest in yourself and plan to win!
Why Financial Savvy is Especially Important for New Businesses. [TWEET THIS]
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