When you enter the world of entrepreneurship, it can be a new phase for your finances. If you’re coming from formal employment especially, then one thing you’ll need to get used to is unpredictable income for a little while. For this reason, getting good at managing your finances is a must, or you could find yourself in serious debt. Managing your money means living within your means and taking those money management skills and extending them to your business. On that note, here are a few essential tips on managing your money as an entrepreneur.
- Track Your Expenses
Having a personal budget is just as important as having a business budget as an entrepreneur. Determine how much you’re going to spend every month after putting aside your savings. Living by a budget is a more organised way to manage your finances, so if you don’t already have one, it isn’t too late to do so.
To create a budget, read about different methods and see which works best for you. For some, they prefer to have separate accounts for their household expenses, while others have mastered the piggy bank method.
- Keep Business Expenses Low
If you want to manage your money as an entrepreneur, then it’s crucial that you keep your business expenses low. Below you’re going to discover a few ways that you can do so.
Be Tech Savvy: Learning how to use tech to save money is an invaluable skill that could reduce your business costs. There are so many software applications that can be used to help you carry out activities efficiently. In some cases, such software could even reduce your need for full-time employees. The Cloud and Skype are other popular examples of free or low-cost tools you could use.
Collaborate: In every sense of the word, collaborating with others could help you save money. One way you could do so is to share costs and services with others such as IT equipment, office costs, and staff transport. Also, try using group buying sites that help SMEs save money by providing discounted deals.
Utility: If you happen to have a physical office, keeping the expenses low there is crucial. Find out your consumption of business gas per kWh and if it’s relatively high, compare the cost to other providers. All of these costs add up, so reducing them could likewise bring down your annual expenses.
- Get Good at Negotiating
Whether you happen to be an entrepreneur or not, you should know how to negotiate. Just like sales, negotiating is a skill that every person should have. When you’re able to negotiate, you’ll find that it can help you get better deals when you’re making one-off or repeat purchases. If you need some tips regarding how to negotiate, make sure you do your homework and see what the average price for what you’re negotiating is. While negotiating, never take the first answer given as you can typically go lower. Also, know who their competition is so that you’re able to use that as leverage.
