Advertising

Ask the Entrepreneurs: 12 Ways to Shore Up Your Company Finances

Advertising
Ask the Entrepreneurs: 12 Ways to Shore Up Your Company Finances

Ask The Entrepreneurs is a regular series where members of those involved in the Young Entrepreneur Council are asked a single question that aims to help Lifehack readers level up their own lives, whether in a area of management, communication, business or life in general. Here’s the question posed in this edition of Ask The Entrepreneurs:

What is one financial resolution that all aspiring entrepreneurs should make for themselves in 2013?

1. Track Your Monthly Income and Expenses

Nathalie Lussier

    This might seem a little too basic, but if you’re not doing at least some bookkeeping on a regular basis, you don’t have your pulse on your business’ numbers. Being able to look at how much money came in and went out in one month is crucial to any startup or aspiring entrepreneur. Even if you’re not bringing much in, you need to know that.

    Nathalie Lussier, The Website Checkup Tool

    2. Increase Your Rate of Savings

    Lawrence Watkins

      Becoming an entrepreneur can be a scary proposition, and one factor that keeps many people from making that leap is finances. If you’re living paycheck to paycheck, then it can be hard to make those tough decisions that may be rough in the short term, but very beneficial in the long term. Once you answer how you’re going to eat and where your’e going to live, you can then focus on your business.

      Lawrence Watkins, Great Black Speakers

      3. Can You Really Live on Ramen?

      Advertising

      Erik Severinghaus

        It’s easy to assume that if you quit the high-paying day job, your expenses will decline in tandem with your income. In reality, that’s a lot harder after you’re used to nicer meals, vacation travel, etc.

        Before you quit your job, figure out what you can really live on for two months and test your ability to stick to that budget. It’s a great way to see if you’ll be happy living on ramen noodles.

        Erik Severinghaus, SimpleRelevance

        4. Take an Accounting Class

        Thursday-Bram

          Even if you never have to do any accounting work at any company you ever start, understanding the basics of accounting will be very useful. Just being able to read accounting reports may save your bacon if there’s a potential issue in your company that your accounting software or a human accountant haven’t managed to pick up on.

          Thursday Bram, Hyper Modern Consulting

          5. Create a Personal Budget

          Advertising

          Derek Flanzraich

            Sometimes, amidst all the startup craziness, entrepreneurs forget to plan and organize their own finances at all. Then, all of a sudden, you’ve ordered expensive sushi delivery for dinner every night and the numbers keep stacking up. Take some time over the holidays to plan out your own budget.

            Derek Flanzraich, Greatist

            6. Join the Peer Economy

            Eric Koester

              The Peer Economy, companies that help you buy, sell, or transact with your peers (think eBay, Etsy, Airbnb, Getaround, Taskrabbit, Zaarly, Odesk or dozens others), is a great way to make money or save money. So participate—either by renting your couch out or staying in an Airbnb place when you travel; finding a developer or selling your services on Elance; or more. But just participate.

              Eric Koester, Zaarly

              7. Give Yourself Permission to Fail

              Dave Ursillo

                Every aspiring entrepreneur should give themselves permission to fail in 2013 because the greatest obstacle that every entrepreneur must (and always will) encounter is fear; especially fear of uncertainty and the unknown. When you give yourself permission to fail—financially or otherwise—you really give yourself permission to try in the first place.

                Dave Ursillo, The Literati Writers

                Advertising

                8. Pay Down Debt

                Elizabeth Saunders

                  If you have personal debt, try to dramatically reduce or ideally eliminate it prior to starting your business. Having lower recurring expenses will give you more freedom to take risks as you build your company.

                  Elizabeth Saunders, Real Life E®

                  9. Real-Time Visibility

                  Robert J. Moore

                    Establish a system to access financial data about your company’s performance on demand and in as close to real-time as possible. This will allow you to feel highly in tune with business growth and tackle challenges as early on as possible.

                    Robert J. Moore, RJMetrics

                    10. Launch Their Company

                    Advertising

                    Aron Schoenfeld

                      Too many people network, brainstorm and whiteboard continuously and just keep adding ideas and layers to their concept. Aspiring entrepreneurs need to draw a line and say “this is our MVP and now we will build it.” Sitting on an idea does not help you or make you any money but building your idea into a product or business will help you validate it and test the marketplace.

                      Aron Schoenfeld, Do It In Person LLC

                      11. Find Great Clients

                      John-Hall

                        Improve profit through better clients. Having great clients really does matter with overall happiness of a company. Make an effort to improve profits by taking on the right clients, not just more clients.

                        John Hall, Digital Talent Agents

                        12. Keep More of the Money You Make

                        Brian Moran

                          Keep more of the money you make! Strive to make sure that your costs are under control, make customers happier, and focus on stimulating repeat purchases from new customers. That doesn’t mean becoming a penny-pincher, but if you have costs that aren’t advancing your bottom line, cut them out! A business is only as strong as the money it keeps at the end of the year.

                          – Brian Moran, Get 10,000 Fans

                          Advertising

                          More by this author

                          9 No-Brainer Ways to Track Employee Time Ask the Entrepreneurs: 12 Things Entrepreneurs Should Stop Doing Ask the Entrepreneurs: 9 Best Note Taking Tools Ask the Entrepreneurs: 12 Tips for Mastering Public Speaking Ask the Entrepreneurs: 9 Tasks You Should be Outsourcing

                          Trending in Money

                          1 Financial Freedom is Not a Fantasy: 9 Secrets to Get You There 2 40 Healthy And Really Delicious Meals You Can Make Under $5 3 Life Insurance: A Secure Way To Protect Your Future. 4 How To Save Money On Groceries: 13 Quick Tips 5 10 Investment Tips For Beginners

                          Read Next

                          Advertising
                          Advertising

                          Last Updated on July 20, 2021

                          Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

                          Advertising
                          Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

                          Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

                          Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

                          Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

                          In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

                          Break Free of Your Finances

                          Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

                          When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

                          Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

                          Though it seems hard to believe, it is really very simple to get financial freedom.

                          To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

                          While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

                          Advertising

                          Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

                          1. Stop Unnecessary Spending

                          We often spend money inwardly, instead of objectively.

                          For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

                          To stop this habitual spending, log down all your spending over the course of a month.

                          Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

                          This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

                          2. Plan a Monthly Budget

                          This is a great opportunity to get serious.

                          Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

                          Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

                          3. Cut-up Credit Cards

                          Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

                          Advertising

                          If not, you may want to consider ridding your life of the burden that credit cards bring.

                          Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

                          Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

                          4. Increase Savings

                          There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

                          It’s good practice to save up to 15% of your income.

                          Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

                          Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

                          5. Invest Wisely

                          Consider investing in funds.

                          Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

                          To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

                          Advertising

                          Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

                          6. Invest in Gold

                          There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

                          You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

                          Another way to invest in gold is through ETFs (Exchange Traded Funds).

                          These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

                          With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

                          7. Stash Emergency Funds

                          Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

                          If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

                          Make it hard to get your cash.

                          Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

                          Advertising

                          8. Find Fabulous Mentors

                          Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

                          If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

                          There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

                          9. Be Extra Patient

                          Patience is the key of financial success.

                          Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

                          So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

                          Financial Freedom for All

                          Anyone can achieve financial freedom, regardless of their financial circumstance.

                          Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

                          Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

                          Featured photo credit: rawpixel via unsplash.com

                          Advertising

                          Reference

                          [1] Hartford Gold Group: IRA Retirement Accounts

                          Read Next