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Step Three- Money Management
This 3rd step is as important as the first 2 steps. In order to have a successful business, the entrepreneur will have to be good at managing money. This is the not time to be cheap. Find a good accountant and learn how some bookkeeping. Being cheap help a business fail as fast as overspending. Set a budget for the business and change it when needed. Nothing wrong with budgeting too low or too high, just make adjustments to the budget and keep track of the spending.
A successful business needs to set up a budget, monthly or yearly budget, to keep track what should be spent and on what. Even budget in for emergencies because they will happen if expected or not, so try to expect it. Monitor the spending on bills, supplies, employees, taxes, etc... Set up other options to pay bills and expenses, such as a savings account, credit cards, line of credit, silent partner, etc... Pre-apply for a business loan and find out the most qualified for and how long would it take to get the loan. Maybe ask a family member, if needed, would they be able lend money when necessary. Keep options available for when time get tough because this happen to a lot of companies.
Set the price of the product/service low enough to win some customers, but also high enough to make a profit. What the purpose of making a sale and still lose money? The business is to make money. Research, what other businesses in the same field, charges and try to be in similar range. Maybe a few dollars or few cents lower.
Keep great bookkeeping of everything bought and sold. Know when to order more product before the last ones are gone. Also, find a good accountant and insurance company. They both may be able to save you money down the road. The more money saved, the less money spent, the bigger the profit. Insurance makes sure you survive when unforeseen incident happens.
Every business have to pay taxes, but a good accountant may keep a business paying too much in taxes. A good accountant will find ways to save a business from paying too much in taxes. Successful entrepreneurs make and save money, any business can lose money.
Managing money is a necessity. A lot of successful company fail to prepare for emergencies. A lot do not have enough insurance to keep them afloat if a unforeseen incident happens, like a fire or robbery. An accountant keep them from paying too much in taxes. A good budget keeps a business owner from over spending. All the above makes a successful business.
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