Running a company can be difficult. The chances are that it’s the most tricky juggling act you’ve ever performed. And, the fact that you’ve managed to get this far is a testament to your skill. Remember that millions of budding entrepreneurs never even get this far.
But, that’s hard to remember when your monthly accounts land on your doorstep. No matter what you do, you always seem to overspend. You’ve done everything you can think of to cut costs, and you’re still draining yourself dry. If things carry on like this, you don’t know if you’ll even be able to keep afloat.
The first thing to remember is that this doesn’t need to spell the end. Remember that Amazon failed to earn a profit for around their first nine years. You’re in pretty good business company, then. For obvious reasons, though, you need to start breaking even to carry on. Which is why we’re going to look at the reasons you just can’t seem to stay on budget.
You don’t know how much money to expect
When you start in business, money is often unpredictable. One month you make a load, and the next, there’s tumbleweed rolling around your bank account. This can make it difficult to predict how much you have spare. But, it doesn’t need to be that way. For one, seeking a professionals with an online mba accounting qualification or something similar ensures you can get a grip on this. They’ll be able to analyze your accounts and help you judge the state of your finances at all times. You may also find it’s worth operating one month in advance. That way, you’ll only ever spend money which you’ve already earned, rather than funds you predict to get.Your prices are competitive rather than realistic
Competitive pricing is pretty important in business, especially when you first start. You need some way to give yourself the edge, after all. The trouble is that you also need to make sure you’re covering the costs of production and materials. Fail to do that, and you’ll soon go under, competitor or no. Make sure it doesn’t happen by always being clear about how much your products cost to make. If you have to charge more than competitors, look for cheaper production options before dropping your costs further.You’re running before you can walk
Being too keen to get going is another common downfall. If you’re hiring staff you can’t afford, for example, it’s no surprise you’re forever over budget. Don’t let it happen by keeping your business small for as long as possible. Never take on team members before your income is steady. Until then, make do with freelancers and outsourced services which you can drop if your budget isn’t up to it.No one said saving would be easy, but there’s no secret to it. Take care of these simple things, and you could see your numbers finally matching up every month.
Yours faithfully,
Your Wounded Finances
