7 financial habits to grow your business in 2021
Most of the dreams of entrepreneurs revolve around a company that dominates the market. If you’re business-oriented, all you want to do is build the next Amazon or Starbucks. Thus, you work to meet the needs of your customers and market your startup using all available channels.
There is more to do if you are looking to build a successful business and even become a corporate giant. There are certain financial habits that you need to adopt to grow your business. The sooner you implement such habits, the closer you get to your business goals.
Here are 7 financial habits you can start practicing today to grow your business:
1 – set specific goals
Goal setting is a habit that shouldn’t be overlooked if you want to be successful at anything. Being a successful entrepreneur starts with the right business goals.
Most people overlook the quality of their goals when they set them. Others have only one idea in mind and not a concrete written plan.
Here are some examples of specific business goals:
- Increase profits to 20% by the end of [year].
- Capture 1% market share this year.
- Hire 10 more people in 3 months.
Suppose the above goals are only to increase business profits, make more sales, and hire more people. It would be impossible to follow the progress because nothing is specific. This keeps your business growth stagnant.
In other words, having clear goals is the way to go!
2 – Track your expenses with a budget
There are many myths surrounding the idea of budgeting. For example, some people think it’s a boring process that limits how they spend their money.
In the truest sense of the word, a budget is a necessary tool to track your income and expenses. You can even create one that allows for a bit of “fun”.
As an entrepreneur, you first need to visualize where you want your business to be in a given time period. You can then calculate your total income and expenses to determine your spending habits.
There is a good chance that you will find expenses to reduce and invest more money in your business. They include groceries, car maintenance and new clothes.
If you find you have non-essential expenses, get rid of them. You can also leave certain activities such as eating out only for special events.
3 – Pay off your high interest debts first
You may have taken out a loan or two to start your business in style. Maybe you have personal loans, student debt, or credit card debt to pay off.
Debt tends to weigh you down and keep you from making financial progress. More of your income will be used to repay it as interest accumulates. You don’t want it to get worse!
One of the best approaches to paying off debt is debt avalanche method. It focuses on paying the highest interest first. For example, you have two credit cards as follows:
- Credit Card 1 – $ 3,000 balance and 23% interest rate
- Credit Card 2 – $ 1,500 balance and 13% interest rate
You will be released from your debts faster by paying a high sum on the credit card 1 each month. For credit card 2, you only pay the monthly minimum.
Note that we have not considered the sales here. Only interest rates!
4 – Avoid using credit cards
Spending cash is a good strategy for save more money For Your Business. There is a good chance that you will be going on a spending spree if you are carrying credit cards.
It’s good to lock your credit cards to end the cycle of debt. Credit card rewards are nothing compared to the wealth you can generate from a successful business.
If you find the transition difficult, leave a card or two for “extreme” cases. This means that you try as much as possible not to charge for items that you cannot pay with cash.
Do you like online shopping? Use your debit cards for this!
5 – Build an emergency fund
You never know when things might slow down for you. In such a case, you will need other means to support your business.
An emergency fund makes it easier to manage unforeseen costs. In addition to covering your living expenses when times get tough, your business expenses will also be covered.
Having an emergency account means peace of mind and more productivity. It is this kind of confidence that can quickly grow your business and make you financially independent.
You can build up your emergency fund by reducing unnecessary expenses. You can free up more money by establishing another income line. A side concert that matches your skills and interests can go a long way.
Have several months of basic spending in the account to allow for a quick recovery from financial hardship.
6 – Read at least one financial book per year
Another financial habit for growing your business is reading about finance. Books are wisdom. And being wise is essential for running a successful business.
Entrepreneurship requires a significant amount of learning. You have to be good at earning, saving, and investing your money. It’s about managing your money well!
There are currently many financial books. Reading a few of them every year is helpful in generating great ideas and making business decisions.
Some of the best financial books today are Rich daddy, poor daddy, The total metamorphosis of money, and You are a tough guy to make money. Make time for at least one book and you’ll be good to go.
7 – Automate your finances
It can take some time to master habits such as saving and investing. Automating your finances means you don’t have to deal with forgetfulness, laziness, and reluctance.
Since many bill payments are automatic today, so should your savings and investments. This way, you won’t have access to your money and will be tempted to spend it otherwise.
You can quickly create a savings account through your bank. It is easier to open an account online than to go to the bank. Most banks have high quality mobile apps to make the process easier.
As an entrepreneur, your financial habits have an impact on your business. If they’re good, they can set you up for success. If they are bad, you will take the wrong road.
So how do you stay on track? Adopt some of the financial habits from this list and you will grow your business.
Author – Mike stuzzi
Mike Stuzzi is an Internet entrepreneur and blogger at Galileo money. He loves to write about money and wealth. In his spare time, you will find him watching commercial shows or taking care of his pets.