Protecting Your Business Coffers

Money is the lifeblood of your business, but unlike real blood, it can run out if you are not careful. It can be spent pointlessly, and silly investments can be made that will ensure that you lose money or worse, empty your business coffers.

As a business owner, you should never be ashamed or embarrassed to confront the financial situation of your business. If you turn the back on your ledger and the financial data you have on offer from your financial systems, you won’t be looking at the real picture. Focus on the reality of your situation at all times and do not hesitate to take a look at your bank accounts and cashflow often.

You need to pay attention to this as you can plan for the worst case scenario. If you ignore the real picture that your accounts provide, you might be sailing full speed ahead into some very rocky shores. Use the data you have to paint a picture of your future. Use it as the foundation of your planning.

It probably goes without saying, but as a business owner you need to be responsible. You and your business are two completely different and separate legal entities. Don’t take money from your business outside of your salary and don’t use your business coffers to fund your lifestyle. This will drain your business of its lifeforce and can leave your business caught short. It’s important to apply this conservative attitude to your business as well – if you expand too soon, you are going to spend a lot of money that you might not have. Growing your business quickly may seem like a great idea, but it is hard to sustain in the long term and booming too soon could leave your business bust. Invest in the right opportunities as well – errors and omissions insurance could save your day. Research on the necessary failsafes should things go wrong and invest in them.

Make sure that your target audience knows who you are. Customers won’t just walk in and buy your products from you because your doors are open. You need to promote your business to your market and educate your target audience about your business to attract the sales needed to generate a decent cash flow.

It is also a good idea to make sure you organize your business well. If you overhire, you’re stuck with a cost. Make your labor efficient and ensure your workforce know their tasks and how to complete them. Structure your days and the days of your team and ensure you’re on hand to support them. If you’re running your business in an inefficient manner, you won’t need anyone to make you aware – your bank balance will do that for you as your business plunges into some terminal financial health.

You can make your business work, and you can make the money that your business earns last, but you need to responsible at all times. It’s never a bad idea to plan ahead, even when the times are good.