I have had this post written for a while now, but was waiting for the best opportunity to share it. It seems with all that has gone on the last several months with the economy, I have not felt right about posting. With that said, I don’t think there is ever a right time. However; Now that the New Year is here, and we have new resolutions, I thought I would be more appropriate to share. I see so many businesses, and people around me (including family and friends) making poor choices when it comes to money, and they never seem to be able to dig our of the bad spot they are in – so maybe they will give an ear to this advice? Either way, this has been on my mind for several months now, and I wanted to post about this topic – so here goes:
2008 was a great year for Dream Systems Media, we have amazing clients with amazing businesses, who are thriving and doing well. 2009 is already turning out to be a much better year, so we have much to be thankful for. Sadly, we also saw companies cut their online marketing budgets which effect us too. All of this really gets me thinking about those businesses who have money, and those who don’t. Individuals, Businesses – it really does not matter, this info still applies.
Do you look at some of the failing businesses around your town, and wonder what they are doing with their finances? No matter how hard we try to analyze the situation, some business owners just aren’t super smart when it comes to dealing with finances.
What you may be doing wrong!
In order to deal with your finances responsibly, you need to know what NOT to do. Here are the five easiest ways to keep your business poor.
1. Get the big stuff wrong. In order to get your finances in order, you need to get the little stuff right. Getting the little stuff right will lead to getting the big stuff right. As an example – Don’t spend outrageous amounts of money on PPC or on online marketing programs you don’t really understand. Make sure that all of your finances are well balanced and proportionate. Don’t take that wrong, I am not saying to not spend money on PPC, just don’t spend a ton of money on it before you really understand how to use it properly. I have had businesses come to me after blowing through 10k in a month on PPC and it not doing anything for it – scratching their head, wondering where it all went wrong?
2. Confuse your business wants with your business needs. Too many people fall for this one. Most consumers mistake their wants with their needs, but business owners fall for this trap too. The difference between your wants and your needs can either send you out of business or keep you in it. You have to get this one right. Think about it this way – Does your office really need 4 of those 65 inch plasma screens in your conference room? One looks just as cool if you are using it to impress. At this point, just having an office and being in business is enough to impress… lol
3. Failing to track down the money. You have to pay close attention to everywhere your money goes. If your business seems to never have extra money, try tracking each and every spenditure. You can make informed decisions and changes this way. A while ago, we did an audit of every place that we spend money. We realized some areas where we could do better, and to make a long story short we ended up saving thousands every month. In some cases – we were paying for programs we were not even using anymore. It sounds silly, but when you are busy running your business you tend to forget about everything you do (or spend money on).
4. Carrying credit card debt. Time have changed, so you must change with it. One of the best ways to stay business poor is to carry a credit card balance. This may seen like a new concept to a lot of business owners, but we are now in different times like I said! Pay off your credit card and keep it paid off. Carrying any credit card debt completely enslaves you to your lenders and ties up almost all of your business cash flow. Using credit cards for business can be a great thing if done right – so don’t take this one wrong, or what I am trying to get across here. If you can figure out a way to keep your business in the green every month, and run your business debt free – you will sleep better at night. Trust me!
5. Living too closely to the edge. You can’t live close to the edge in your personal life if you want business financial freedom. Living too closely to the edge prevents you from having a cushion. Any minor financial setback is considered to be a major roadblock. Stop spending so much and start saving. If you have a savings cushion, you and your family will be well-protected down the road. If you grow your business right, there will be time to spend money on things you don’t really need, but want!
These are five common ways that cause businesses financial bondage. If you want to experience financial freedom for your businesses, you need to make smart decisions. Pay close attention to these suggestions to help you earn the financial freedom that your business deserves.