Small business spending mistakes to avoid
It is the American dream to be your own boss, start your own business, run your own company, and make millions.Just picture it now; there you are sitting at your beautiful custom made mahogany desk dressed in your Armani suit with your Montblanc pen in hand, ready to sign your multi-million dollar contract.You may laugh a little to yourself when you read that but chances are that secretly part of you wanted to be that business person.
The point of this illustration is to shed light on the fact that as a business person just starting out, you are not going to have all the bells and whistles of a fortune 500 business.To be quite honest, it is better that you didn't.Just as living beyond your means and going into debt because of it is not good for your personal finances, spending money unnecessarily on your business is a waste that will come back to haunt you.
Many business people who have great business planning skills, a marketable product and a customer base, fail in the business world because they cannot take control of their spending. The bottom line is that smart business people only spend money on necessary things and then they make sure to spend only that which is necessary.Don't let your brilliant business ideas go to waste because you can't settle for less than the best. Here are some suggestions of small business spending mistakes that you should avoid and some smart spending solutions to help make every dollar you spend count.
A big part of running a business is being able to handle the problems that you are faced with.Many times those problems take on a monetary component.Handling your finances under stressful situations can be hard to do, but planning for the unexpected can help you to keep your cool.
Put off the costs that you can
While you should never miss a payment or pay more interest than you have to, the first few years of your business are generally not the times when you want to pay more than you have to for anything.If you can buy your office supplies on a deferred interest plan, do it.If you can pay for a service monthly instead of up-front to cover the year, it is probably a safer thing to do.After all, you never know how quickly or slowly your business will grow.If the worst should happen and you need to take a step back from your business, at least you won't be stuck with unused policies and plans that you paid for in advance.
Have a plan for your cash
Small business owners who have fast success can be lulled into a false sense of security.Just because you are doing well now, does not mean that you will be doing well a year from now, or even a month from now.If you spend your money on everything you want instead of saving and re-investing, you will soon realize that you may have a lot of nice new things, but your business is bankrupt.
Be frugal, not cheap
Spending less is not just about choosing the cheapest option.You must use your problem solving skills to find a solution to your monetary troubles in a way that what you get for your money has a high value, not necessarily a high cost.Money isn't always the answer.Many times some elbow grease and creative thinking are enough to get you what you need and a fair amount of what you want. Know the difference between what you want and what you need.