You have to stay on top of it, or it will climb on top of you and stress you out. Keeping three pieces of advice in mind can help focus your mind when to comes to handling the money for your business.
- Charge what you’re worth. No matter how hard you work, if you charge your customers less than you’re worth, you won’t be able to stay in business for long. Why would you charge less than you’re worth? Well, some people do so because they don’t realize exactly how much they are Others charge less than they’re worth because they’re embarrassed or afraid to ask for an amount that reflects their true worth. Whatever the reason, if you don’t get paid what you’re worth, you may very well drive yourself out of business.
If you don’t know what you’re worth, find out what other companies charge for similar products or services by researching catalogs, price lists, stores, and e-commerce and auction websites. If you can’t find written prices or listings on the web, call or email the companies for information. From there, develop a pricing or fee structure that will help you attain your personal goals.
- Avoid unnecessary expenses. Spend your company’s hard-earned money only when you have to. You can often get a lot more mileage out of stuff than your itchy spending urges would prefer. A good example of this is your personal computer. Every other week, computer technology makes another great leap forward, which may constantly tempt you to upgrade to the latest and greatest and fastest computer with all the latest bells and whistles. Unless your older, slower, and less flashy computer — and the software within it — is actually getting in the way of your ability to do business efficiently, stick with it for as long as you possibly can.
Do your best to hold the line on all the other expenses that simply drain your financial reserves while bringing in little or no additional revenue. If you’re going to eat out, for example, go to less expensive places. Save the expensive meals for your highest-paying customers. Or consider inviting your best customers over as dinner guests in your home.
- Manage your cash flow. Cash, or the lack of it, is one of the key indicators of a company’s success over the long run. If you have cash, you can buy and stock new products for your customers, develop innovative new services for your clients, pay for your day-to-day operations, and expand your business. If you don’t have cash, your business will certainly suffer, and so will your customers and clients. You may even jeopardize your own personal or family financial situation.
Simply watching your cash flow — the money going in and out of your business — isn’t enough; you have to actively manage it. Managing your cash flow means looking to the future, planning and scheduling your projected cash inflows and outflows, billing quickly, staying on top of money owed you, and paying attention to the money that goes in and out of your business.