Turning the company into a lucrative business is not an easy task: in addition to a clear vision of the market, it is necessary solve all financial problems to ensure the success of the initiative. Before venturing into business, it pays to learn as much as you can about running a business.
That is why we have selected 6 tips to help you at that time. Meet her below.
Management, planning and control are the keywords
“Rule number one: never lose money. Rule number two: Never forget rule number one.” The phrase from Warren Buffet, the third richest man in the world, is considered a mantra in the business world and encapsulates the need to control financial resources in order to be successful.
But putting this idea into practice is not so simple. In order not to lose money and have financial problems, the entrepreneur must adopt management toolswith clearly defined planning and absolute control over income and expenses.
This is defended by James Caan, CEO of Hamilton Bradshaw, a management consulting firm. “If I could give one piece of advice to someone new to the business world, it would be to make sure the cash flow work efficiently from the start,” he writes in an article published on the site of the English newspaper The Guardian.
“I’ve seen many spectacular and innovative ideas fail just because the mentors ran out of money and couldn’t pay the bills,” adds the entrepreneur. To prevent this from happening to you, you should follow a few recommendations:
How to avoid financial problems
Evaluate the business plan
This is perhaps the most important phase in the early stages of the company: without a coherent business plan, with solid foundations and detailed, you can get lost. Market analysis, a marketing plan and an operations plan are some of the elements that you should consider.
Monitor cash flow carefully
The best way to keep spending under control is guard the entrance and money out through money flow. Previewing financial transactions is the only way to end each month in the dark.
stop updated record all financial transactions, including expenses and income dates to adjust budget forecast and cash flow.
Manage the duty cycle
From manufacture to receipt, organize yourself to cover financial expenses at each stage (purchase, production, warehousing, sale and receipt, etc.).
Calculate the ideal price
When calculating the price of your product or service, you should be as objective as possible. Factors to consider include supply, demand, production costs, profit expectations, partner involvement, rent and sales commissions.
Negotiate with suppliers
act concepts and values with suppliers to ensure a balance between expenses and revenues: Fluctuations in demand can lead your business to bankruptcy if financial cycles are not planned.
Training is the weapon against financial problems
Several governments offer incentives to do so entrepreneurship programsranging from conferences, seminars, free events and online courses. Before risking your ideas and money in the business world, it is better to search for a lot of information and document yourself.
In addition to studying the materials on the topic, it is worth knowing successful experiences and failures related to the sector in which you wish to invest. Learning from the mistakes of others is less painful than making your own mistakes.
Some entrepreneurs believe that only the deep knowledge of the field of action guarantees success. However, reality shows the opposite: without dominating management techniques Business, the chances of success are rapidly decreasing. It doesn’t matter how qualified the professional managing your finances is: they are necessary know all processes and monitor every decision closely, the future of your business depends on it.