Finance is one of the most important part of a company. A company spends money just to make sure that all its finances are in order. This even more important in start-ups where finances are limited and every single penny is expected to be out to right use. This makes it uber important for an entrepreneur to make sure he doesn’t commit a financial blunder which makes his life a living hell. We present you a list of financial steps that an entrepreneur should NOT take.
During your early days, you will want to spend all the money you earn or receive as funding in the company in hopes of expanding your business. As ambitious as it may sound, it is not the best practice that a business owner should follow. Instead he should always maintain a healthy liquidity for any unseen liability that his business may face.
HOLDING BACK ON KEY AREAS
Having made the point above, it is also important not to hold funds when it comes to invest in the important areas that will benefit your business like marketing on a certain website or advertising on a certain billboard or sponsoring a certain team, event or show.
RETURN ON INVETMENT
This is a crux of above two points. To decide whether to spend money at a junction or not, you should always consider the ROI of your investment. This will help in most of your spending decision and will help you cut unnecessary spending.
PULLING THE PLUG
Not all your idea or product will end up as a huge success It’s a bummer but not a deal breaking thing. What may make it a deal breaking point is when you ignore the fact that your product is a failure and keep pouring money in it which is as good as pouring money in ocean in hopes growing of a money plant.