A Little Organisation Goes A Long Way
Excellent organisation comes from a disciplined mind. It is not a gimmick, but more of a tactic that can avoid and even resolve many accounting and administrative problems for entrepreneurs.
An example would be, separating personal accounts from company accounts, which can be an arduous task for many first-time entrepreneurs. But, it is critical to ensure perenniality of business. The key is not to mix the company profit into monthly income; to cover personal expenses, such as rent, food, bills, and miscellaneous expenses.
An entrepreneur needs to be rigorous and diligent with this financial separation and should not put his personal needs above the business.
Suppose For A Minute
A generic advice given by most industry experts is to think of your company as a family, yours if it makes you feel any better. As a breadwinner, your primary duty towards your dependents would be to bring them food to eat, and you would do so before you had the chance to eat yourself. Business is just the same. You put your business priorities and needs before your own.
When you choose to fund the business with your money, that’s because you believe in its future prospects. So, most of the profits that you make should be put back into the business, for the sake of expansion or bringing in new workforce.
Your Company = Biggest Investment.
If you believe in the growth of your business, then you must devote a majority percentage of your earnings towards its expansion into those sectors that need improvement.
It is obvious, that during the course of events you cannot manage every dimension of business on your own, so, for this reason, you will need some expert help.
Investing in hiring the required manpower, is a profitable step towards business profitability.
Don’t Be Cocky
It is normal for an entrepreneur to endure hardships on the voyage to finding entrepreneurial success, and during the operation of business, there will be certain times when you feel that you are doing good, and you tend to use some of those profits towards gaining personal comfort.
Such behaviour is deadly and must be avoided at all costs.
You can’t fit the role of an entrepreneur if you do not act like one. Entrepreneurship is more of a spiritual journey than anything else. During this period, an individual discovers himself/herself and at the end, figures who they are, what they are made out of, and how far are they willing to go?
There is absolutely no chance of finding answers if you live in comforts and spend like a king.
There are 3 parameters to consider when establishing an entrepreneur’s salary.
- The Reality Of The Business- No set value can be determined regarding investment and employee bonuses, gains, salaries, etc.
- Discover The Right Parameters- Ask yourself some basic questions, like how much would you earn for fulfilling the same duties elsewhere?
- Evaluating Personal Needs- Entrepreneur’s personal needs should be at its minimum unless it’s a case of emergency. Creating a spreadsheet, and stating all expenses will give you a tangible idea of how much you need to cover your monthly bills.
Cluttering your personal and business accounts not only leads to confusion but also fails to make a positive impression on your potential investors.
When you operate a business, it is always advised to open a separate business account. This way, your personal expenses and business surcharges, never meet and both function well in a symmetric manner.
Bear in mind, if you do not take a strong action regarding the separation of personal and business accounts, you are digging a grave for your company. Running a business is like going to a war, you can never be short of funds, and you must always have finances in order.
If you still do not have a bank account dedicated to business, now is the time to do it. If you feel better about having a business account with a different bank than yours, then do it, perhaps that way you’ll never reach for that debit or credit card meant only for business use.
You need to figure out a strategy using several means available at the disposal for today’s entrepreneur, make use of them all and do not mess up!