Being an entrepreneur is never easy. You have many responsibilities and you have to work hard. But at Coopealianza we know that being an entrepreneur is also a source of pride and achievement for many of our clients and associates.
A businessman or a businesswoman is a leading person who provides opportunities to his family, community and collaborators.
For this reason, today we want to share 3 tips to have healthy finances in your company:
Organize your financial information.
We've talked about it before on this blog, but the first step is to understand: How much income do you have? Where exactly does that income come from? How many fixed expenses do you have? How many responsibilities (taxes, insurance, CCSS and pension fees, among others) must you attend to each month to run a stable and prosperous business?
It is also important to identify if you have unnecessary expenses and eliminate them as soon as possible.
And even if your company has a CFO, as a team leader, it's your job to understand where the money is coming from and where it's going. Make friends with your Accountant, and if you can, from time to time hire an external audit specialized in your business model.
Separate your business finances from your personal finances.
We know that it may be obvious for many people to read this, but some entrepreneurs, especially when they are starting out, mix these two budgets. They take their household expenses or even their personal expenses from the company's money without taking any type of order, and end up "eating" the company.
Earn a salary, as with any other employee, and cover your personal expenses and those of your family from there. It does not have to be a very low salary, but it must be reasonable and fair. And, also make your personal budget to better manage your monthly expenses.
And finally, create a contingency fund.
It works the same as when we make a personal budget and in the process we open a emergency savings account that covers us in the event of a health or unemployment situation.
A contingency fund is a kind of guarantee or support for your company. And it should be part of the planning and projection of your business. It is not about being negative and thinking that we are going to go bankrupt, it is about being cautious and having vision.
The financial freedom that we all seek has 3 principles:
- Being able to pay all bills and meet our obligations.
- Have a surplus for contingencies (savings in a special fund that should not be touched unless it is an emergency or an unforeseen event that cannot be covered with normal business income).
- Acquire a certain amount of capital to support the company.
From there, smart investments can be made to expand savings, such as buying shares of other companies on the stock markets, or making improvements (in infrastructure or technology) that will positively impact the performance and competitiveness of your business. And in case you require it, at Coopealianza we have a business line of credit. Contact us and we will provide you with more information.