Setting up your business for the first time? Check out this post that discusses simple tips for first-time entrepreneurs willing to effectively manage their finances.
For an entrepreneur, new or not, money is essential. The need to make money is essentially the reason you spend many sleepless nights, drawing up a perfect business plan, promoting your products or services, dealing with clients, attending to many routine administrative tasks and the list goes on. All these long hours and hard work you have put in makes it even more critical you master how to manage the money you make.
Money management is an essential skill for a business owner, who wants to save money and use limited resources judiciously. Here are seven tips to help you manage your money more effectively.
Tips for entrepreneurs to effectively manage their business finances.
- Set a budget and stick to it
As an aspiring entrepreneur, you need to draw up a budget. More so, draw up the budget and adhere to it. This can be quite challenging for first-time entrepreneurs. You must ensure your monthly or annual budget is realistic and covers all your necessary costs. You need to practice self-control as a business owner.
- Spend less save more
You have probably heard this statement a lot. However, cliché or not; it is an essential aspect of money management. Be frugal with your expenses. Do not spend unnecessarily. Look at your daily habits and try to cut back on those expensive and impulsive spending habits. Spend on your needs/essentials and not on your wants.
- Separate your business revenue from your personal income
Separate your personal income from that of your business and your business expenditure from your personal expenditure. That way, you can track how much is coming in as revenue, and going out as expenditure.
- Organize your business activities and transactions
One way to manage your business finances is to keep track of your business activities by making sure everything is organized and filed. Catalog all your expenses, even the most trivial ones. That way you can monitor and control your spending.
Organizing your transactions can do wonders for your business finances. As a first-time entrepreneur, you must be able to keep and retrieve files of all your transactions, which will include invoices to clients, receipt of bills paid, receipts of equipment bought and installed, etc.
- Set short term and long term realistic goals
As a first time entrepreneur, you need to have long term and short term business and financial goals to achieve success in your business finances.
The goals you set-up will give you a clear view of where you want your business to be at a certain point and how much effort you are looking to put into it.
- Create an emergency fund due to business fluctuations
As a new entrepreneur, you need to know that business is not always going to be pleasant. It could get tough, really tough. It is a good idea to have a saved up fund when your business is experiencing difficult times.
As a new entrepreneur, money management is a very essential skill to have. Without it, a new entrepreneur will drive his/her business to the ground. To make your new business a success story, it’s important you build your money management skills.
How we can help
The Mentor Nigeria Academy has business courses on Money Management for young and aspiring entrepreneurs. Mentor Nigeria provides support for every aspect of your business – customer strategy, marketing and business development, business structures, operations, financial management, etc. Register for Opportunity Discovery Day to get started on these opportunities.