Most entrepreneurs’ dreams revolve around having a business that dominates the market. If you’re business-minded, all you want to create is the next Amazon or Starbucks. So, you work to meet the needs of your customers and market your startup using every available channel.
There’s more to do if you’re looking to create a successful business and even become a corporate giant. You need to adopt some financial habits to grow your business. The sooner you implement such habits, the closer you get to your business goals.
Here are 7 financial habits you can start practicing today to grow your business:
1 – Set Specific Goals
Goal-setting is one habit you shouldn’t leave out if you want to succeed in anything. Being a successful entrepreneur starts with the right business goals.
Most people overlook the quality of their goals when setting them. Others only have an idea in mind and not a concrete written plan.
Some examples of specific business goals are as follows:
- Increase profits to 20% by the end of [year].
- Capture 1% market share this year.
- Hire 10 more individuals in 3 months.
Assume that the goals above only said to increase business profits, make more sales, and hire more people. It would be impossible to track the progress because nothing is specific. Doing so keeps your business growth stagnant.
In other words, having clear goals is the way to go!
2 – Track Your Spending with a Budget
There are many myths surrounding the idea of budgeting. For instance, some people believe that it’s a boring process that limits how they spend their money.
In the real sense, a budget is a necessary tool to track your income and expenses. You can even create one that allows a bit of “fun.”
As an entrepreneur, you should first visualize where you want your business to be within a specific period. You can then calculate your total income and expenses to determine your spending habits.
There are high chances that you’ll find some monthly expenses to cut down and invest more money in your business. They include groceries, car maintenance, and new clothing.
If you find out that you have non-essential expenses, get rid of them. You can also leave some activities such as eating out for special events only.
3 – Pay off Your High-Interest Debts First
You may have taken a loan or two to start your business in style. Maybe you have personal loans, student debt, or credit card debts to settle.
Debts tend to weigh you down and keep you from making financial progress. More of your earnings will go toward their repayment as the interests accumulate. You don’t want it to get worse!
One of the best approaches to debt payment is the debt avalanche method. It focuses on paying off the highest interests first. For instance, you have two credit cards as follows:
- Credit Card 1 – $3,000 balance and 23% interest rate
- Credit Card 2 – $1,500 balance and 13% interest rate
You’ll be debt-free faster by paying a high sum on Credit Card 1 each month. For Credit Card 2, you only pay the monthly minimum.
Note that we haven’t considered the balances here. Only the interest rates!
4 – Avoid Using Credit Cards
Spending with cash is a good strategy to save more money for your business. There are high chances that you’ll go into money-spending sprees if you carry credit cards around.
It’s good to lock away your credit cards to end the debt cycle. Credit card rewards are nothing compared to the wealth you can generate from a successful business.
If you find the transition challenging, leave one or two cards for the “extreme” cases. This means that you try as much as possible not to charge items you can’t pay for with cash.
Like online shopping? Use your debit cards for that!
5 – Build an Emergency Fund
You never know when things might slow down for you. In such a case, you’ll need other means to support your business.
An emergency fund makes it easier to deal with unexpected costs. Aside from meeting your living expenses when times get hard, your business costs will also be covered.
Having an account for emergencies means peace of mind and more productivity. It’s that kind of confidence that can quickly grow your business and make you financially independent.
You can build your emergency fund by slashing your unnecessary expenses. You can free up more cash by establishing another line of income. A side gig that aligns with your skills and interests can go a long way.
Have several months’ worth of basic expenses in the account to enable a swift recovery after financial difficulties.
6 – Read at Least One Financial Book Every Year
Another financial habit to grow your business is reading about finance. Books are wisdom. And being wise is essential for running a successful business.
Entrepreneurship requires a significant amount of learning. You need to be good at earning, saving, and investing your money. It’s all about managing your money properly!
There are many financial books available now. Reading a couple of them each year is helpful for generating great ideas and making business decisions.
Some of the top financial books today are Rich Dad, Poor Dad, The Total Money Makeover, and You Are a Badass at Making Money. Find time for at least one book and you’ll be good to go.
7 – Automate Your Finances
It can take some time to master habits like saving and investing. Automating your finances means that you don’t have to deal with forgetfulness, laziness, and reluctance.
Because many bill payments today are automatic, your savings and investments should be too. This way, you won’t access your money and be tempted to spend it otherwise.
You can quickly set up a savings account through your bank. It’s easier to open an account online than going to the bank. Most banks have high-quality mobile apps to facilitate the process.
Wrapping It up
As an entrepreneur, your money habits have an impact on your business. If they’re good, they can set you up for success. If they’re bad, you’ll be heading down the wrong road.
So, how do you stay on the right track? Adopt some of the financial habits on this list and you’ll grow your business.
Author – Mike Stuzzi
Mike Stuzzi is an Internet entrepreneur and blogger at The Money Galileo. He loves writing about money and wealth. During his free time, you’ll find him watching business shows or caring for his pets.