Most entrepreneurs I know have taken few, if any, business courses. They are creative, imaginative, and ambitious to no end, but they couldn’t tell you the first thing about what sound financial management means. If you’re not one of those entrepreneurs, then read no further. Go about your merry sound financial management way. But, if you’re one of those entrepreneurs who are finding themselves drowning in the spreadsheets and jargon of the financial world, keep reading for tips on how to stay afloat.
First of all, we all know the saying hindsight is 20/20. But I like to believe that foresight can be 20/20 too. The most important key to running your business on sound financial ground is to be prepared. Anticipate not only the good times but also the bad – after all, I would bet that you’re sure to experience both down the road. Much like you need to be prepared when making a pitch to a potential venture capital investor, you need to prepare yourself – and your business – for the fiscal road ahead.
Secondly, and this may be a no-brainer to many, conserve, conserve, conserve. People are often surprised to see just how much they really can put away for a rainy day. And not only does having an emergency cash fund help you meet your own needs down the road, but it also looks good should you ever be making presentations to investors. They want to know that you’re not burning money or needlessly running of money on a constant basis.
Thirdly, a strategy of sound financial management means being committed. You need to learn to stick to budgets, financial plans, investment strategies, bill payments, and so on. Just like you can’t be late on a debt payment, you can’t venture outside of your budget when it comes to personal or frivolous expenses. Spend only what you’ve committed to spending and no more. Likewise, save what you’ve committed to saving and no less.
No matter how many night courses they take, many entrepreneurs find that they just can’t get a handle on their finances by themselves. It’s never too late to ask for help, except when you’ve already run your business into the ground. If you know you need some expert advice, get if while they can still help you. And get it before your business hits tough financial times; you need a strategy in place beforehand to get you through it.
Just like it can take what seems like ages to obtain the necessary financing, it can seem like ages building up a sound financial strategy. These days it’s not just about saving and spending; it’s about so much more. In order to compete, your business needs to be on solid financial footing. Plant the seeds and get the wheels in motion. Be patient while things get moving.
We may not like hearing about financial management, but unless we heed its call, we’re bound to find ourselves, and our businesses, floundering in a sea of spreadsheets that we know nothing about.
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