06/04/2021
No matter where you are in your business, data collected from small business owners shows, how overwhelmed companies feel when they hear budgeting, money management or even financial planning.⠀⠀⠀⠀⠀⠀⠀⠀⠀
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Those same data show as well that the small business that follow consistently certain habits outperform the ones who do not.⠀⠀⠀⠀⠀⠀⠀⠀⠀
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Sound financial planning is key to success for any business enterprise.⠀⠀⠀⠀⠀⠀⠀⠀⠀
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In my 25 years of work experience and my own recent personal experience, some of the important features of a great financial plan are: ⠀⠀⠀⠀⠀⠀⠀⠀⠀
1. Simplicity is key to understanding and easy managing your finances. Keep it simple.⠀⠀⠀⠀⠀⠀⠀⠀⠀
2. Foresight is important to make sure you always have the needed capital and cash at hand when you need it.⠀⠀⠀⠀⠀⠀⠀⠀⠀
3. Flexibility simply means is easily re-adjustable to changes in the future to profit the most.⠀⠀⠀⠀⠀⠀⠀⠀⠀
4. Optimum use of funds. Money ought to work hard for you. Just as you for hard for your clients. ⠀⠀⠀⠀⠀⠀⠀⠀⠀
5. Liquidity – aka Cash – a certain percentage ought to be kept in liquid cash depending on your business size, entity, credit status, turnover rate and nature of business.⠀⠀⠀⠀⠀⠀⠀⠀⠀
6. Anticipation of SOS situations – You need to plan for rainy days. Be prepared.⠀⠀⠀⠀⠀⠀
7. Economy – the cost for your money (for (for example interest on loans or fixed dividends on preference shares ought to be related to your earning capacity. At no point do they reduce the profit and hence the growth of your business.⠀⠀⠀⠀⠀⠀⠀⠀⠀
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Things around planning your finances are clearer now, arent’t they? Even if not, let me assure you that It’s never too late to create better financial habits. There is always a more, a deeper sense of understanding and steering.
Whether you are still in the process of getting your business off the ground or you're several years into pursuing your dream, it's never too late to improve your "financial hygiene." Even if you already follow some of the habits listed above, it's always possible to grow and improve.