While it’s true that mistakes are common in life, there are some which consequences are more serious than others, including in business. Apparently, there are some big financial blunders the entrepreneurs do you have to avoid.
Emptying Their Bank Accounts
Entrepreneurs are typically really bad at preserving cash. As soon as they have some money in their bank account, they tend to reinvest it constantly in their companies. While it’s true that this action has a great ROI potential, it actually makes the business owners vulnerable to changes in marketplace.
Keeping cash, in business, is like having an insurance against life, considering how uncertain the future always is, be it related to the personal life or business which may require the owners to have cash on hand. And once that time finally comes, you’ll be truly thankful you had it.
Spending Money without Considering ROI
Each dollar amount the company spend has to have the potential positive ROI. Unless you can quantify it, don’t chase after “branding” or vanity. Potential is a must.
Spending Too Less
There are costs necessary to grow the business and don’t skimp on them, although you aren’t making a lot of money for now yet. Don’t apply the same frugality you do to personal life in business. Spend money on services and products to simplify the business life, grow your bottom line, or make your business more efficient. Think long term.
Disorganization that Results in Extra Expenses
Avoid disorganization and practice an organization system that will make sure the nuts and bolts are in place for business efficiency.
Spending Everything during Tax Time
Again and again, remember that the money your business spend has to have a potential. Hence, just because it’s a tax write-off, don’t think that it’s okay to spend everything, especially if it’s not for something essential to your business.
Not Knowing When to Turn or Quit
Your traction is having paying customers within the first few months after the business starts. Using a different definition of traction means a tomfoolery, waste of time, and delay of the inevitable.