Are you making these money mistakes in your business?
You’re an ambitious person and you likely became an entrepreneur because you saw you could do more in your career. You wanted to reach higher, reach more people, and make your mark in the world. Being an entrepreneur offered you a way of doing that, and you hit the ground running.
You learned all the things: marketing, sales, social media, the technology, and so much more. You tackled that learning curve and absorbed all the knowledge. Yet, you keep wondering, where is all my money going….
Business is about numbers, and to be an effective CEO of your business, you need to know your numbers.
Often I see these mistakes that entrepreneurs are making. Are you making any of them?
1. Not having a plan
Regardless of how many years you’ve been in business, if you are operating your business without a financial plan, you are putting your business at risk. A financial plan is essentially a business operating budget that plans out concrete revenue goals and an expense plan designed to achieve those goals while maintaining a desired profit margin.
Thebalancesmb.com states that “A detailed and realistic budget is one of the most important tools for guiding your business.”
2. Not charging what you’re worth
If you are discounting your rates because you think you’ll get more clients or you’re afraid to charge more, you should reconsider this strategy. First off, you are worth charging fair market value for your services. Secondly, clients are smarter than that and are willing to pay top dollar when the value is there. Think about the message you are sending and the type of client you are attracting if you discount your rates.
3. Not knowing your business numbers
If you are selling an offer and you have no idea if it is profitable, or what the profit margin is on that offer, you are asking for trouble. You need to know how much you are making off each offer. And more importantly, you need to understand the cost of selling that offer. When you know the expenses, you can see where you can trim down expenses which makes that offer more profitable. And more profit = more money in your pocket.
4. Poor record-keeping
Keeping your books current and up to date is so important. Your books may seem like a tedious task, but it is that financial data that gets entered that tells the story of your business. It will tell you how the business is performing, how to manage your cash, how profitable the business is, where your strengths and your weaknesses are, and so much more. Financial information is invaluable, and when you learn how to use it to your advantage, you will be unstoppable.
5. Negative money mindset
Limiting beliefs and negative mindsets are issues that can hold even the best entrepreneurs back. The brain works in mysterious ways and works to protect you from harm. So having negative issues creep in and hold you back is part of the process. The key is to be self-aware and deal with any issues that are creeping in. Types of money mindset issues are not charging what your worth, being scared to make a sale, limiting how much money you want to make in your business, and so on. Everyone has a money story and you should take the time to examine yours.
The bottom line is that mistakes happen, they are a part of life. The good thing about mistakes is that we can take the opportunity to learn from them. Nobody is perfect, and in every mistake, there is an opportunity for growth.
Take this opportunity to protect your business finances, and your money, by investing in the skill of knowing your business numbers.
You have plans. First Midwest Bank has ideas to help grow your business. Visit FirstMidwest.com/SmallBusiness