Habits are everything. The point applies in business – coaches and creatives who have good financial habits tend to make better decisions than those who lack them.
If you have poor financial habits, your business could be suffering as a result. What’s more you may not be aware of the behaviours that are costing you money and slowing your growth.
Let’s look at four bad financial habits that could be hurting your business:
#1 – Not Paying Attention to Expenses
One of the biggest killers is neglecting to keep track of expenses. This often leads to overspend on unnecessary items, or worse: not having enough money to cover necessary costs. The key to overcoming this habit is creating a budget and sticking to it.
This will provide clarity on where you’re overspending, so that you can make the appropriate changes. For example, if your business spends too much on programmes to boost your business, then consider looking at the impact of courses already taken and difference made to your business (in time saved and money made).
Working with an accountant is a great way to keep you accountable. This right accountant can help you create a meaningful budget and help with making strategic decisions.
#2 – Paying Too Much for Office Space
Another common mistake is spending too much on office space. This can be a major issue, especially if your business isn’t generating a lot of revenue.
Where possible, consider working from home until your business is more established. You could also look into renting space on a shared basis, or taking out a flexible contract with a coworking space. This means you won’t have to worry about forking out for furniture and equipment, and you’ll have the flexibility to pay for less space when things are slow.
#3 – A DIY Attitude
Doing everything yourself saves money, right?
Wrong.
This is often a huge waste of time and money. In some cases, you may end up doing more damage than good. Especially true when it comes to financial matters.
Hiring professionals to help you with bookkeeping, accounting and other financial matters can save you a lot of time and money in the long run. Not only will you have more time to focus on what you’re truly good at, but you’ll also have peace of mind knowing that everything is being handled correctly.
#4 – Lax Invoicing and Billing Practices
Another bad financial habit that can hurt your business is lax invoicing and billing practices. This happens when you don’t send out invoices in a timely manner, or when you don’t follow up on unpaid bills.
Both of these things can lead to money being left on the table and no one wants to do that!
It’s a good idea to create an invoicing and billing schedule. This ensures that your bills are sent out on time each month, without fail. It also helps you avoid forgetting about overdue bills, so that you can promptly follow up with clients.
#5 – Not Setting Out Terms
It is up to you how and when you get paid, so it’s important to be clear on how you want it to happen. Payment in advance, regular monthly payments, credit terms – these are in your control, so decide in your favour. Without cash, your business is going nowhere fast.
Final Thoughts
Be sure to avoid these bad financial habits if you want your business to win! Implementing a budget, working with professionals, billing on time and setting your terms are all great ways to keep your finances in check.
Over time, good habits compound to provide great results!