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The Four Biggest Money Mistakes A Business Can Make

– Contributed content –

14 September 2017. A business already has enough on its plate trying to keep profitable. In a competitive market, you’re always fighting for revenue sources, new and old. You’re balancing the costs against income. You’re looking at where to invest that offers the most return. You don’t need these mistakes on top of that struggle, making it all the harder. But the fact is that many business owners make these mistakes and end up costing themselves the business. Let’s look at the mistakes you can avoid and why they’re so important.

Empty pockets

(1820796, Pixabay)

Getting too competitive

The simplest way to get competitive, if you don’t think too hard about it, is to lower your prices. Sometimes, it can work as a short-term strategy to raise cash when you really need it. Find the right price point with the help of sites like businessinsider.com. Not only for the consumer but for you. Otherwise, you will never pick up the pace of earnings that the business needs. If you have to get competitive, be more creative about it. What area of the business can you focus on that your competitors don’t? What niche can you better fit?

Wallet in vise

(Steve Buissinne, Pixabay)

Taking on more debt than you can handle

It’s the mistake of many a novice entrepreneur and even those who simply aren’t all that used to credit. You see the opportunity to get more cash so you take it. But if you’re not considering the repayment strategy and how it fits in with the overall health of your finances in the long-term, a loan can soon feel like a heavy ball and chain weighing the business down. Beyond how much you borrow, you should always have a business debt reduction strategy working to get you back in the black as soon as possible.

Tax consultant cartoon

(Alexas Fotos, Pixabay)

Giving yourself more tax headaches

There are two ways a lot of business owners give themselves more tax issues to deal with. First of all is in choosing the wrong structure. If you’re looking to start a business, it’s worth looking at howtostartanllc.org to see structures that simplify the tax situation by separating you, personally, from your business as a distinct financial entity. This makes it a lot easier to sort out your expenses when tax season comes around and much easier to get through an audit. The second mistake is not having a chartered accountant helping you navigate tax deductions and rules. Getting your taxes wrong is an easy way to get a hefty fine down the line.

Lady Justice

(jessica45, Pixabay)

Not being prepared for trouble

Damage to property and assets. Theft. Legal trouble. If you don’t have the right financial protections in place, these can all easy create a slippery slope that takes the business deeper and deeper into the red. Insurance is one kind of protection. Assuring law-abiding policy and practices is another. Even having a cost reduction strategy, such as switching to more energy efficient business methods or relying on software to make the company more productive, is a preparation worth spending the time creating.

Above all else, correcting the mistakes above will simplify your finances and make your business more viable. Don’t let one or two mistakes sink your whole company.

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