6 Small-Business Financial Mistakes and Solutions

Financial Mistake #1: Mixing Business and Personal Finances

Solution: Keep your business finances and personal money separate.

Set up separate high-yield savings and checking accounts for your business, and pay yourself and your expenses out of that. Your tax accountant will thank you—and you’ll get so much peace of mind.

Financial Mistake #2: Going in Debt to Build Your Business

Solution: Operate at the speed of cash.

Remember: In the same way the tortoise beat the hare, slow, incremental growth beats getting in over your head in debt only to crash and burn. So pay with cash—even if you have to scrape nickels from the couch or save up for big purchases.

Financial Mistake #3: Not Knowing Your Numbers

Solution: Know your numbers.

You don’t have to handle the details of your company finances, but you do need to regularly look over the work of the person or people handling your finances.

Financial Mistake #4: Making Big Purchases for All the Wrong Reasons

Solution: Act your wage.

The most successful businesses wait until they have the cash on hand to buy nicer things. That’s acting your wage. No deal was ever made or lost based on the couch in the reception area. That’s ego. So operate your business with the resources you have.?

Financial Mistake #5: Not Paying Your Bills and Taxes on Time

Solution: Pay what’s owed by the due date.

When you stick to a budget you’ll find it’s a lot easier to stay on top of accounts payable. Your budget helps you look ahead and plan. Then you won’t have scattered bills and scary late notices hanging over your head.?

Financial Mistake #6: Focusing Only on Your Profit

Solution: Be generous.

Profit keeps your business alive and allows you to enjoy the fruits of your labor. But making money only so you can buy cool stuff and feel important leads to an empty life. When you take care of your team members, customers and community, they become evangelists for your business. And fulfilling your mission gets a lot more fun!

These six solutions are EntreLeadership’s 6 Profit Principles—aka your guardrails against money mistakes. Want more details on the 6 Profit Principles (and 4 Key Practices to Create Financial Peace in Your Business)? Check out the EntreLeader’s Guide to Business Finances.

You can grab the guide here: EntreLeader's Guide to Business Finances