Financial Management for Entrepreneurs
Managing finance is the very crucial part of a business, we all know that the sustainability of a business is in the inflow of income, but what we forget that the sustainability of a business is actually in the manner at which we re-invest our income.
I will be discussing on managing your finance as an entrepreneur, which I will split into Four points. I will start by saying financial management is a heart of running a successful business. It affects every aspect, from managing cash flow and tracking business performance to developing plans that ensure that business owners can make the most of opportunities.
Managing finance is the very crucial part of a business, we all know that the sustainability of a business is in the inflow of income, but what we forget that the sustainability of a business is actually in the manner at which we re-invest our income.
READ MORETherefore, in other to be a good financial manager, one will have to adopt this few principles,
1. Prudence: being economical , not extravagant. "Only prudent expenditure may provide quality within a restrictive budget.
2.Ability to forecast: as a good entrepreneur, this is the greatest skill one should have, you need to have a glimpse of the future and plan cause in business the competition is always introducing new ideas. Therefore, ability to identify the trait of your business line and your weakness, which you will turn into your strength.
3.draw a line between your business fund and your personal fund: In a land where there is no law, abuse is inevitable. One of the problem most entrepreneur have is separating personal fund from business, some don't know that as they pay their employees salary, they ought to pay themselves too. There must be a balance I. Your income and expenditure, cause for every credit entry there must be corresponding debit entry.
4. Aim for customer satisfaction: in my little life. I got to understand that the satisfaction of your customer is key. Therefore. You need to be creative, consistent, reliable, offer quality product to the market. The satisfaction of customers expand the target market, and help the entrepreneur to segment the market and get.more audience.
Moreover, financial management is at its most powerful when u use it to drive improvement in the business.
Finally, financial management plays such a vital role for the survival and growth of a business. It's like a telescope into the future guiding you to walk around pitfalls and find the shortcuts on the way to your goal thanks for reading.
COLLAPSEQuestions:
For a beginner that the customers do not say appreciative words. What can you do?
Well, for a beginner, you need to actually have a selected target market, which you will get your feedback from.
Let take a lady making package chin chin for am example, she supplies then to nearby stores and supermarkets.
Her feedback comes from those points, because the customers get to lay their complaint to the cashier, so as an entrepreneur always ask.
Question:
1. Since I'm the owner of the business, how do I determine how much I am to pay myself?
2. If I must really meet up with my customers satisfaction 100% I might actually lose my net profit may begin to run at loss or what do you advise?
Answer:
The point in paying your self is to differentiate between your capital and profit, E.g let's assume I invest 30,000 and I in turn got 60,000, before expenditures such as (light, transportation,) etc, and then you pay yourself and at least the person, which after it all u discovered you have 40,000 which means on that particular job, you just had a profit of 10000 to add to your capital and re-invest. Meeting up to customer satisfaction in an effective. Efficient way, cause human want is insatiable, so my point is to pay attention to your target audience.