Being in business is a big deal. It is not easy to be your own boss and run a company, whether you’re a one-man band or the head of a multinational corporation. Although businesses come with their many complications, one of the biggest areas of concern is always finance. When you first start out and want to ensure that you're as frugal as possible, it is definitely important for you to think about sticking to a few financial essentials. If you want to find that your business flourishes and that you are able to grow from strength to strength, here are a few business financial tips that you should keep in mind.
Cash Is King
The number one rule in business finance? Cash is king. Always! Because businesses are there to make money. You didn’t start out for something to cost you money and then fail. You started out to make money and take control of your own income and future. And if you want that to happen, it’s essential that you know cash is king. Because it’s that idea of making money that’s the most important of all. And to do that, you need to have money coming in, and equity within the business. Without that, you could struggle.
Debt vs Equity
And while we are on the subject, let’s talk about debt versus equity. Because not only is this important in the initial financing of your business, it is essential for your ongoing operations. Equity is important. Having money in the business is important. Making more than you spend or owe is important. Always. It is not something that you should forget, especially if you ever want to make an impressive profit.
51 Per Cent
At some point on your business journey, you may consider taking on investors. This could even be something that you do at the very start of running your business. But, if you want your business to do well, and to have as much control over both the financing and the operations, the number 51 should be important to you. Because you have to be the majority shareholder at all times. Even if you are the majority shareholder at 40 percent vs. 30 percent + 30 percent, it is too risky. Should the second shareholder sell to the third, you are no longer the majority. So always keep 51 percent of business equity for control.
Protect Your Investments
Next, you need to be thinking about every business financial decision you make, particularly big expenditure. Although you can visit a legal site to find out how you’re covered under the lemon law, it’s something that you don’t ideally want to have to do. Instead, you should protect your investments by being smart with your money and reading up first.
Profit, Profit, Profit
And one last final point, going back to the idea of making money, and keeping money in the business, you have to ensure that you have one word in mind at all times; profit. Because if you can’t turn a profit, you may as well call it a day. So always ensure that you’re maximizing your profit potential where you can, and you should always see financial success.
I hope you enjoyed this article about how to make every cent count in your business finances.
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