Business Startup – 3 Critical Business Financing Mistakes To Avoid
by Birmingham City University
If you were to start committing any of the following 3 business financing mistakes too often, you would greatly reduce your chances of long-term business success. And to be a success in business you have to think long-term. Track record and reputation in business is earned over time. A good business track-record is largely judged on financial success and financial success in business is assessed largely through the examination of business accounts. Good business accounts demonstrate to banks, financiers, colleagues etc., that you are a bankable business person and will lead them to put their faith and money into you and your business ventures.
By not committing any of the following 3 business finance mistakes you will, at the very least, have good financial indicators and be able to respond to the businesses financial position in time. The key here is to understand both the causes and significance of each.
Business Financing Mistake # 1 – No Monthly Bookkeeping
Regardless of the size of your business, inaccurate record keeping creates all sorts of issues relating to cash flow, planning, and business decision making. In a word, your business is doomed if you are not doing monthly bookkeeping.
Bookkeeping services are dirt cheap compared to most other costs a business will incur. Bookkeeping should be done on a monthly basis along with Management Accounts so that your financial records are always up to date and you can view the financial status of the business (Profit and Loss, Balance Sheet etc.,)
Once a bookkeeping process gets established, the cost and time involved usually goes down. By itself, this one mistake tends to lead to all the others in one way or another and should be avoided at all costs.
Business Financing Mistakes # 2 – No Projected Cash Flow & Budget
Having no meaningful bookkeeping creates a lack of knowledge on where you are. And having no projected cash flow and budget creates a lack of knowledge about where you’re going.
Without keeping score, a business tends to stray further and further away from its targets and, invites a crisis that eventually forces the business to change it monthly spending and cash-management habits.
A projected cash flow first and foremost needs to be realistic. You should project both a best-case and worst-case scenario based on projected sales and business expenditures. It’s a good idea to aim for the best-case scenario but know how the business would respond should the worst-case scenario transpire.
Business Financing Mistakes # 3 – Inadequate Credit Control
There’s nothing worse than making sales, doing the work, sending your customer an invoice and then not getting paid on time…or worse still not getting paid at all! It’s a well-established fact that the longer a debt isn’t collected the less chance it will be collected. Typical credit terms in most established business are 30 days. However, due to a culture amongst some customers of paying late and small business not operating strict credit control, a business can often not get paid on time and fast run out of cash. So how do you avoid this? Well, there are numerous steps you can take but the following 3 steps will help ensure you always get paid…and paid on time.
1.Appoint someone in the business to be in charge of credit control. It’s vital that someone is responsible for sending out invoices and statements; reminding the customer that payment is due, handling queries on invoices etc.
2.Reinforce your payment terms and conditions on your contracts, on your website, on your invoices etc. It’s important that customers are aware of your payment terms and the consequences of late payment (cessation of service, interest charges etc.,)
3.Send your invoices on time and include a statement of the account with each invoice. If you don’t send your invoice out at the end of each month how can you expect to get paid before the end of the following month.
In a world of tightening credit from banks, strict business finance practices are required even more. You can’t expect your bank to extend your overdraft or facilitate a term loan if you are guilty of any of the 3 above financing mistakes.
There’s so much more to business finance and money management than I have covered in this article that I could write a whole book on it! But for the moment if you are starting out or taking over the running of a business and are experiencing working capital or cash-flow difficulties than I would first start investigating these 3 key areas and see that they are being managed diligently. If you do this, than many of your cash-flow difficulties will begin to disappear and your business finances will improve quickly (assuming your business proposition is sound in the first place and sales are strong). Find out more about business, personal finance and wealth creation strategies by signing up NOW at www.MillioniareMindsetSecrets.com.
Filmmaker Carol Pineau, in her feature documentary, “Africa: Open For Business,” explores the details of a very profitable entrepreneurship in Botswana.
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@barlog20 stupidity at it’s best!
@Bobbyaf Blacks don’t buy jewelries. We don’t have the same culture of gold and diamons than western ppl. They’re the only one who buy. So, stop your black nationalism that leads to no where but poverty. Look at zimbabwe and the rest of africa.
@TemplarX2 Have you read about Zidare? Lol getting your news from 24/7 propaganda machines is not wise. Believing that the West merely put travel bans on Mugabe and his cronies is idiotic. They put fucking sanctions on Zim that have been hurting it’s economy. Minus all of the racial slurs dude above me is right. The West and the Uncle Tom’s who enable them have/are exploiting the hell out of the continent.
@TemplarX2 when will you ever learn to address people with respect, instead of using derogatory terms.Its the west that uses aggression all over the world inorder to loot, and steal ,i.e IRAQ
Let me remind you that when you are in Africa, you play by my rules.This is my Continent, that God(Allah) the most great has given to us to settle and enjoy of his countless blessings. All you can do now is to reminisce and cry allegator tears for the Black Continent that is out of your reaches!
@TemplarX2:yeah i read about Zimbabwe cave beast.They economy improved over the past year and is gonna continue to thanks to the black government.When Zimbabwe was controlled by a caveman albino kracka.He was oppressing black people and making his caveman race over there live comfortably.
You are a true nigger, aren’ t you? when will you niggers learn that cooperation not aggression the key to development? Did you read about Zimbawe?
sadly thts tru. Batswana must lern to support their own industries coz da tym SA biznes decides to pull out frm Bots we’l be doomed!
We need to get these krackas out of Africa.Its not good for krackas to control Africas economy.We as black people when are we gonna stop letting other groups exploit us?Where is our self respect?
Shut the fuck up kracka or what ever you are.Its a black country so it should be a black government.
You are not suppose to trust other races stupid.
So take your we are the world shit to Latin America and look at how those black latinos are treated with there white latino Government.
Botswana is one of the better African counties.
i live in botswana and all thse businesses u talking about ur all owned by boers don’t u know south africa wons botswana’s economy all those kfc,nandos,shell,stanbic,game, etc ur all owned by south africans{white}
LOL Mewz
Lowest corruption in Africa?! I’m going there to open up a business…
Botswana’s economy, unlike South Africa, is run by Batswana, a predominantly black population which makes black empowerment irrelavant. In fact South Africa looks up to Botswana’s examples in a lot of succesful citizen empowerment policies. So do your research…
That’s exactly what I was thinking.
That’s working out real well. You don’t elect or let people run a Country , because of skin color. You want the most itelligent. If that is an African then so be it, If it’s a White woman then so be it.
Botswanna needs to follow the example of south africa with black empowerment!
If it wasn’t for stupid AIDS, they’d be doing even better.
I just found out that Botswana is a middle income country not a poor country. For a Sub-Saharan African country, that is great. I hope Botswana becomes a model for other African countries.
It is brilliant that it is not the people of Botswana themselves who speak like this about their country. They let others do the assessment and the talking so that they learn the truth about their own country. If there is criticism, it will be taken positively to improve things. Keep it up Botswana!
Botswana is a highly educated society filled with hardworking people. I have not heard of political crisis in this country in modern times. A model economic nation
hahaha.. I see a black guy controlling tha Usa..!! FUCK YOU!!!
Hell NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!
With so many diamond sorting and polishing company setting up in Gaborone Schacter & Namdar has to be really careful…Otherwise the company will find itself outside and figuring how to get inside again.
When the effects are gone, which they are far from being gone.
This series should only show black people who owns businesses. Show a black african running a big/medium business in europe.