By Ryan Velez
As an entrepreneur, several of the first major decisions you make are the most critical of all. Knowing how to handle your money is the major difference between growth and being one of the statistics of businesses that fail in their first few years. Black Enterprise recently shared an article with some of the most important money lessons you will want to know to start your business off right.The first tip is to avoid falling into the trap of letting future income guide the financial decisions you are making for today. Yes, part of being an entrepreneur is having a vision but when it comes to money, you want to be a little more realistic. Money can be unpredictable in those early stages of business, so try to see what is consistent and base your financial decisions off that. A good practice to get into is putting together a spreadsheet that outlines the needed expenses of every investment you make. If you find that you can cover the cost along with your normal costs and still have a little cushion, you are in a position to move forward.
Another tip is to think long and hard before making the leap to a physical location. For many, this is a sign that you have “arrived” as a business, but don’t move so fast. The money that you spend on computers, rent, new office furniture, and other expenses can’t be spent on different parts of your business or used to implement new plans. Working out of your home or the local library may not be glamorous, but there will be time for that later if your business is successful.
The final lesson talks about accountants. It’s tempting to keep putting this step off early on, saying that you want to wait until you have a little more money. However, this may not be the way to think. You need to keep track of where every dollar in your business comes from and where it goes. Without a proper structure, it will be nearly impossible to make educated choices on when to implement changes. All of these are best handled by a certified public accountant to guide you in the right direction. Use your network to see if you can find someone that you can trust.