What is the first thing that pops up in anyone’s mind when they hear about entrepreneurs? Money isn’t it?
When you look up for successful entrepreneurs like Bill Gates, Mark Zuckerberg, one most definitely get intrigued by the amount of wealth they possess.
On the contrary, as widely as this idea of entrepreneurship is gaining fame. One must not forget the challenging efforts behind it.
Entrepreneurship isn’t an instant thing. It is brought into an action through a proper plan and implementation process.
Entrepreneurship requires consistent, timely efforts, critical and analytical skills and not to forget the prompt decision making and problem-solving skills because who knows if the implemented strategy doesn’t work out? That’s where your problem solving and decision-making skills will help you out.
Hence the continuous efforts do lead to a successful and smooth execution of business which can be a reason for immense financial benefit for the entrepreneurs.
For the people in their start-up phase they usually never pay heed to their financial planning, which becomes one of the reasons for their business plan to not run for long.
So, would you want your day and night efforts you dedicated in planning your start-up to go in vain just because of inadequate financial planning? Don’t think so?
In this article you’d come across some of the amazing ways of maintaining your finances. But before we jump on to the discussion of finance habits. Let’s first know why maintaining personal finance habits are important? Why do we need to learn these in the very first place?
Why Personal Finance Planning Is Important?
In a nutshell, your personal finance planning helps you in determining your long-term as well as your short-term financial goals through which you can keep check on various areas concerning your business as well as your personal income issues.
Below we will shed light on 7 personal finance habits of successful and wealthy entrepreneurs.
- Profit and Revenue:
Often the young or new entrepreneurs get confused between the concept of profit and revenue, they often go through various resources to understand this concept or learns while purposing their essays in business school through essay writing service.
But no need to worry because below we explain this in simpler terms.
Revenue is the amount of money at which your product or service has been purchased or sold, whereas profit is the amount of money that remains after the exclusion of the expenses, like debt, operating costs and etc.
Once you learn this difference you are ready to manage finances effectively.
- Payment of Tax Money:
The quite frequent mistakes businesses or any other organizations make is ignoring the payment of tax money.
During the successful and smooth running of the business make sure you put some money aside for the payment of taxes.
You wouldn’t want to get under the rubble of a huge amount all at once. Right? Tax money is a mandatory process so it needs to planned anyways.
There have been 3 methods of tax planning suggested: Purposive Tax Planning, one with a clear objective in mind, Permissive Tax Planning, one that is according to the framework of law, and Long-range and Short-range Planning one done at the start of every fiscal year.
Undoubtedly, your proper tax planning can put you on the track of financial growth.
- Self -Payment:
Just like a key maker who charges for providing services or an academic writer who charges for coursework writing service, entrepreneurs do deserve to keep a fair share of money for themselves as a salary.
You can do this by withdrawing a reasonable amount of money timely, this way you will be able to manage and support your family alongside your business.
- Debt Payment:
Heading off to debt is a usual and frequent matter in business when encounter uncertain situations or if one has to make an immediate move-in business then people usually resort to this way.
Hence, while one resorts to this option of debt, they should keep in mind the budgets of their business and the affordability and also should pay their debts on time because if not done so this can prove to be one disastrous step to ruin one’s business.
- Keeping Records:
It doesn’t matter how effective one’s quantitative skills are or how critically one keeps the records of their business.
It is common for the human mind to miss or slip something in the rubble of carrying various responsibilities. And not to ignore. This little ignorance can cost you enough.
So, in order to keep oneself away from making these mistakes, use software or excel/ spreadsheets for staying updated and well informed about your Bank statements, Credit card statements, transaction records, payrolls. This way you will stay aware of your daily, weekly, and monthly finances.
- Separating Business and Personal Bank Accounts:
This is another impressive strategy used by various successful entrepreneurs. Often laziness to operate two bank accounts lead one to use their personal bank account for both purposes. But this can lead you to confusion and to lose check on your financial activities.
- Staying Organized:
Not to forget but this key skill is mandatory and a pathway of success for every profession. Once learned no one can stop you from being successful Setting up a business can be a tiring and daunting process, but once you learned these key skills of financial management you are ready to reap the fruits of your hard work.