Sometimes they’re as simple as forgetting to complete a minor task we had set up for ourselves, something that can be easily remedied the next day. But sometimes we slip up in a big way – a way that costs a massive amount of money. When this happens, hearts stop, heads explode and the chaos can be impossible to control until things are remedied and settled and the business owner is a little greyer up top.
No business owner wants to deal with the fallout of a financial mistake. But anyone in a position of leadership or management knows that the concept of a perfect path to success is a laughable one, and there will be a good deal of missteps along the way.
The Intuit Small Business Blog recently published an article entitled 4 Solutions for Common Small-Business Money Mistakes, which offers some advice on how business owners can steer clear of making things problematic as far as financials go. The article cites some thoughts from industry experts, who bring some of their own tips to the table to provide readers with an all-around insightful post.
From the article:
1. Focus on building your business credit. Just as it takes time and effort to establish your personal credit history to secure lower-interest credit cards and loans, you need to intentionally establish a credit history for your business.
Carlos Gomez, managing director at Provident Dedicated Services, explains that the better your business’s credit history is, the less you’ll have to involve personal assets in any type of business loan — and the less you’ll pay to secure the financing.
To get started, Gomez recommends setting up small-business credit accounts with your existing vendors (such as Office Depot or Staples). He says that after using those accounts responsibly for about six months, you should have some credit history established. After that, you can move on to securing a small-business credit card and eventually, larger loans or lines of credit.
As is the rule for many financial aspects of owning a business, start building your business credit early and you’ll thank yourself later. Using the credit responsibly is a key take-away here – watch it carefully, don’t let yourself get carried away with it and you’ll be in a much better position in the long-term than you would be if you simply treated it like a limitless supply of free money.
The article also talks about making sure your retirement plan still fits, keeping receipts for deductions, and estimated tax payments. While the article is written with an American audience in mind, the general message and point of it is something that Canadian business owners can also learn from.
Check out the article when you’ve got some time and see if you pick up a few tips for avoiding financial mistakes with your business.
What do you think? Did you find the article useful? Have you made any financial mistakes with your business? Your thoughts are always welcome, so let us know!
July 1, 2023
