Money Mistakes You Could Be Making With Your Business Right Now

If you own a business, you’re moving at full speed and working on dozens of issues every week. Given the hours you work and the fast pace of change, it’s hard to stay on top of business finances. Consider these common financial mistakes business owners make, and how you can avoid them.

When you first started your business, you knew there would be many pitfalls and hurdles to get through before you reached success. You make the effort to learn new skills and gain knowledge, but that doesn’t stop the unexpected from happening. When mistakes happen, it usually results in a loss of time and most importantly money.

Once you accumulate some profits, you need some low risk options for investing, so that you can earn a reasonable return on your profits, without taking a large amount of risk.

Some of the biggest money making mistakes that could happen to you include incorrect contracts, lack of business planning and inefficient marketing techniques. Read how you can avoid these mistakes and generate better business results.

Do Your Need a Written Contract?

Business owners sometimes forget about the need for a written contract as they struggle to build a company. The challenge here is that the contract prevents problems down the road- and a contract may not seem necessary when you set up an agreement with a partner, vendor, or a customer.

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When you started your business, you might have trusted a close friend or family member to work with you, and a written contract seemed too formal. This is where many entrepreneurs will lose money, because they haven’t put the correct legal paperwork in place. You should visit WeisblattLaw.com to get an official contract drawn up between you and your partners, so you don’t have to worry about getting into disputes down the road.

Is Your Marketing Effective?

Marketing is the process of getting attention and generating interest, and if you make smart choices with your marketing dollars, you can generate a big return in the form of increased sales and earnings.

Some businesses just start running a marketing campaign, cross their fingers and hope for the best. If you don’t have a close eye on how each of your marketing efforts is performing, you may be throwing money away.

Fortunately, online marketing (websites, landing pages, email campaigns) make it easy to tweak your approach and improve your results. Don’t neglect your marketing- take a look at your performance at least once a week.

Why Overhead Is Ignored

Overhead is defined is costs that you cannot directly trace to your product or service. Direct costs, like raw materials or labor hours, are easier to track and apply to the total cost of a product or service. Overhead costs are less apparent, and they’re sometimes ignored.

There are many ways in which you can reduce your overhead costs and stop wasting money on unnecessary bills. You might be paying a large amount of money to rent out a workspace or overpaying for your energy usages. Monitor every overhead cost and look consider making cuts in order to increase efficiency and reduce costs.

What’s Your Plan?

Just rolling with an idea might seem fun for the first year of running a business, but many people will start to get off track. Keep your focus and plan for the future, because you don’t want to put all of this hard work and money into a company for nothing.

If you take the time to plan, you’ll find ways to lower your costs and make your business run more effectively. Make adjustments to your plan as circumstances changes, and if you’re ever unsure about anything, seek out advice from an expert.

The future of your business will be looking much brighter as long as you consider these potential money pitfalls.

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl

 

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