We all make mistakes. Often it’s the best way to learn. The lessons that hit the hardest, stick the longest. Some mistakes we want to avoid when we can. Especially financial mistakes. Here are the top 3 financial mistakes small business owners and professionals make and a quick thought on how to avoid them!
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Mistake #1: Not holding themselves accountable on their financials
Ever heard of a camel sticking it’s head in the sand? The saying sums up a behavior that’s all too common for people, we don’t want to know what we don’t want to know. Our financials, especially, are easy to avoid. It’s almost like saying, I can’t be sick if I don’t realize I’m sick…well guess what? You’re still sick! Understanding our financials are an extremely important undertaking. It doesn’t mean you have to do it on your own but you need to understand the accounting and finances behind your business.
Tip #1 – Get a bookkeeper, an accountant or an outsourced CFO to HELP YOU understand your financials and never ever be the camel.
Mistake #2: Not pricing their offers profitably
Ok, 85% of small business owners Tracey has worked with price their services and offerings low. So low in fact that most end up spending more in time and expenses than they actually net. Ouch.
Tip #2 – If you haven’t opened your business yet, get realistic about the time spent, how much you should be paid and the total expenses that go into a sale. That should drive pricing. If you have opened your business and you’re not sure…when 85% are off the mark, chances are you may be too. Find someone like Tracey that can help do a deep dive on pricing!
Mistake #3: Not getting access to credit right away
Credit takes time to build and the earlier you start the easier it will be to get credit.
Tip #3 – You can often personally guarantee a business loan or credit card early on. Remember, banks love to lend money when you don’t need it and are notorious for not being available when you do. Set up credit early to protect against the need for it later!
What other mistakes have you or other business owners you know made?
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