Without capital, a business isn't really a business, but instead, a train headed for imminent destruction. Are you forcing your capital meter in the right direction? More than market trends and consumer patterns, your own efforts as a business owner can have the greatest impact on your ability to build wealth. Know what mistakes to avoid.
Investing Too Much Into A 401K
The idea that you can invest too much into a 401K probably sounds like nonsense. However, if you're the owner of a new small business, this is something you can easily do. If you're using business funds to invest, every dollar you put into your 401K is a dollar taken away from your business.
While saving for your future is important, if you can't satisfy customer orders because you can't buy materials – how will you be successful? In the beginning, only invest what you can comfortably afford to not reinvest in the business. Until you reach this point, invest the bare minimum and as painful as it sounds, investing nothing at all, is the wiser decision.
Hiring Cheap
When it comes to the products or services you offer, you want customers to walk away with high quality in mind, not cheapness. If this sounds like you, ask yourself are you putting cheap over quality when hiring staff? Quality team members are educated, knowledgeable and experienced in their said area of expertise.
A cheap employee is one with very little or no education, knowledge or experience, but you can pay them with a low wage. In the end, quality is always the better option. The more experienced the team member they more they can bring to the organization, the more they can serve your needs and offer more value. Always hire with quality in mind.
Only Focusing On Sales Goals
It's a great idea to have a goal in mind when it comes to sales. Just don't over-consume yourself with this goal. Making this mistake will cause you to neglect your bottom line, which is critical to keeping your business afloat.
For example, if you're only focused on reaching a certain amount in sales, you might spend too much on material costs, forgetting about other operating expenses, sending yourself into the red. It's okay to be ambitious and set these types of goals, but make sure you're putting everything into perspective.
Avoiding these mistakes can help your build business capital and continue charting on the course to success. Always keep these tips in mind.
Share23 May 2017
When I began my first business selling sports equipment locally, I knew the sports-world well, and I knew how to run a business. One thing I did not know a lot about was the financial world. I had never applied for a loan in my life other than when I financed my car with the dealership in-house financing. My first application at a large bank was denied. I began looking into my other options, and I found that there were more lenders for new businesses than I realized. I applied at local credit unions, local banks, and other business lending services. I was able to secure more funding than I even expected, and my credit is just average. I created this blog to help other new business owners realize that there is funding out there. You just have to find it and apply! Don't give up on your dream.