Four ways to manage finances while driving growth in business
Here are four mindsets that every entrepreneur should have about finances – Rajiv Talreja
Being an entrepreneur is a challenging yet enticing job. It comes with profits as well as the possibility of losses. It certainly comes with its fair share of disadvantages and advantages. In order to succeed in your business, it is imperative to manage your finances while driving growth and to follow money discipline while containing expenses. At the same time being proficient at budgeting in order to achieve success. When certain steps aren’t taken with care, it can also be very easy for simple things to become complicated very quickly. Here are four ways to manage finances while driving growth in business.
Discipline with money means what?
Our elders, mostly our parents have always insisted from a very young age to be as disciplined with money as possible. But what does it mean? Being strict with money? Only saving and not experiencing it? No. If you only save money without experiencing it, earning money will seem pointless.
Having a money discipline and a sound personal finance system means setting practical financial goals and then tracking the progress. Especially for entrepreneurs, the general notion is that if you are an entrepreneur, you are probably minting money! But the reality becomes the opposite if you do not follow a personal finance philosophy and a money discipline.
Before you look for how to manage money and begin a personal money management system, there are certain essential mindsets you need to start internalising. These have given me the necessary results I needed as an entrepreneur. Let’s explore them below:
1. Keeping ‘you’ separate from ‘your business’: What does this mean? Entrepreneurs need to understand that they are a different individual and their business is a separate entity. You need to honour your financial requirements from the business. This as a mindset is very important to inculcate. When you mix both and treat the business’ money as your money and vice versa, you end up putting all your money into the business and you don’t have anything for yourself. When you do the opposite, that is treat the money your business makes as your own, you irrationally spend that money and deprive your business from having a healthy cashflow.
2. You deserve to be paid a salary through your business: For the time, efforts and skills you put in your business, you deserve to be compensated. You deserve to be remunerated with the profits that your business makes. This is a non-negotiable because if you are not taking home a fixed salary from your business’ profits then you are putting your personal lifestyle as well as your family’s future and well-being in jeopardy.
3. You need to prioritize your necessities and savings: If your business is unable to generate the amount of money you wish it did, then at least prioritise the necessities for yourself and save a bit with the amount of money that is able to generate. Draw a salary that will help you manage your necessities. You cannot compromise on them as well as save. It is a habit of saving even when you don’t have enough that will help you continue saving when your business is able to move from struggle mode to profitable mode.
4. Your business is a vehicle, it’s not the end goal: It is a vehicle to fulfill and take care of all the stakeholders involved- your customers by giving them value products/services, your teams by giving them a good career growth and good quality of life and also you by giving you the required financial growth and brand growth that you desire. So, treat your business as a vehicle to fulfill the end goal of your as a business owner which is- fulfill financial growth, brand growth and get the time freedom you need. Once you imbibe these 4 mindsets of personal finance and money discipline in your life as well as in your business, you will be able to drive a business that gives you the desired results without money being a deterrent.
Article is contributed by Rajiv Talreja: Founder of Quantum Leap Learning Solutions Pvt Ltd, Author of the Bestseller book – Lead or Bleed, Investor, TEDx Speaker, Founder of Dream Craft Events and Entertainment Pvt Ltd, and Dream Catcher Investments Pvt Ltd.