Don’t Think You Need To?

If you do not think that you need to do this type of detailed accounting of your business, you are setting yourself up for a big failure.  Now, that is not to say that you can not make a profit by being sloppy, but remember, we are talking about the long term here.

Even very large, international companies are very careful about where every penny that they spend goes.  After all, this is money that could be doing something for the business, right?  It does not matter if you have hundreds of dollars to budget or billions, tight money management is the key to successfully funding any business through good and bad times.

In addition, make sure you are monitoring these numbers as well.  It does not do you any good to put in place a system and to use it but not to utilize it to the fullest extent.  The fact is that you should be doing these things:

1. Determine where money is going and if it is being done accurately.
2. Determine where you can cut back in costs and expenses.
3. Determine what you can do differently for less funds so without jeopardizing the actual quality of your business.

Being a bit tight wadded with your business is not a bad thing, assuming that you take care of all aspects of the business’s need including reinvesting and growth potential as well.



Your Cash Flow
The next money management principal that you need to take into consideration is that of your cash flow.  Without having a good amount of cash flow in your business, it will sink.

If you are a small business owner, it is even more important to do this simply because there is nothing and no one behind you to support that bad year or that big accident that has happened.  Loans are only so good and they are not any good if you can not get them.

The ability to maintain your cash flow is the key to having a successfully and long term business.  Without your careful management of cash flow, your business will not make it through leaner times or even the better times for that matter.

How do you do this?  There are several things that you need to take into consideration here.

First off, you should make sure that as the entrepreneur you have a good strong hand in the cash flow of your business.  You should be able to personally monitor it each and every day. 

Does this sound like too much?  If you do not do this, you can not possibly know where your business stands on any given day.  That can lead to potential long term problems with your success.

Carefully consider each and every expenditure that you make.  As an entrepreneur, you need to make these decisions wisely.  Just as growing too fast can hurt you, so can not having the cash flow to support your business in the short or long term can.

In addition, you should personally monitor your budget, your expenses, your profit and your ability to use every dollar that you have wisely.  That is what you have those budgets in place for, after all.  Use them, keep at them and work each dollar to get the most out of it.