Five Financial Hacks For Entrepreneurs

Starting a business can be exciting but managing a business can prove to be really difficult. It is therefore not surprising that a lot of businesses die before their first birthday. A common reason for the failure of some of these businesses is the mismanagement of finances, this is because quite a number of entrepreneurs are bad stewards of money,.

Nevertheless, some people have mastered this money game in their businesses and it’s been the turning point for them. So, we spoke with a couple of outstanding entrepreneurs and these are some of the financial hacks they shared:

Track All Cash Inflows And Outflows

We picked up this hack from a make up artist who recently launched her own cleansing product for make-up brushes and this is what she had to say:

“I started makeup and business as far back as 2013. Initially, I wasn’t making any money and I just kept pumping my stipends into the business. Then 2015 came and I met amazing people. I decided that I wanted to start making money from my business and that’s how it started. I knew how to save, so that wasn’t a problem – I can look at money in my account and not touch it until it’s absolutely necessary, but with a business like make up artistry, I had a huge challenge of organizing my money.

So I started writing things down in a jotter and that saved my life. As at that time, there were not so many apps that could help with that and I didn’t know how to use Excel sheets. I’ll just write immediate expenses on my notepad or on my blackberry phone then transfer it to my money jotter later. I still have some of those jotters till date and it brings me joy to see how far I’ve gone with it. So, writing things down is my first hack. Get a small jotter and pen. Put it beside your pillow and write out the day’s expenses. Group them into business and personal, important and unimportant.”

Keep Your Business & Personal Income Separate

This particular hack is not new. You’ve probably heard it before but here’s a practical approach that we heard:

“Honestly, I can’t say this enough. Move your funds into separate accounts. I’m too lazy to go to the bank and queue to open another account, but there are apps that help you do that easily. One thing that helped me was apps like Barter and Piggyvest. I have more than one business now. So I separate the money using these apps. Also, Moneylover. I paid for the app and it allows me write my expenses daily! I love it because it’s easy to use and the interface is smooth but I don’t know if it works on Android because I use it on an iPhone.”

Pay Attention to Your Costs

If you’re in production or even rendering of services, you should pay close attention to this hack that a bakery owner shared with us:

“Every person has to cost their product to know how much they spend on production and how much they’ll gain. So I do my costing and I take it very seriously. That’s why I don’t give discounts as much, because I would have costed everything. When I charge you for a cake, I already know the amount for production and the amount for profit. Costing is important in everything, even to the minutest of things like a simple ball around the cake. This helps me to keep track and not run at a loss. So when I have an order, I leave my cost of production in a particular account and move my profit to another bank account. I only go to the market with the cost of production to source for materials for the client’s cake. That way, I don’t get tempted to take out my profit, I’m able to stick to the cost of production I set out.”

Buy in Bulk

This hack goes beyond the spheres of entrepreneurship alone. At the onset of COVID, a lot of households stocked up on supplies and if you entered a store, you would find empty racks because food supplies were sold out. We had someone share how critical this tip has been to her business:

“Buying in bulk is actually very good. Not even just because it’s cheaper. When you buy in bulk, it makes you accountable because you need to track your usage of the materials over time to know how long the materials should last for. So when a client comes to you for a product and you already have the materials, some of that could go into your pocket, but you should be careful since you’ll still need to save up to replenish when the materials run out.”

Invest In Your Business

The only way to grow money is to invest it. When your business is generating cash, it’s most likely consuming a lot of cash too. It makes sense that you plough some of that cash back into the business to keep it going. We spoke to a skin care boss and she had this to say:

“One thing that helped my business financially was putting the money from the services I rendered right back into the business. This was by buying the products or equipments I needed for the business almost immediately after I had made a sale. This actually took a lot of discipline because there were times the money that came in was too little to buy a particular product and I had to save the money I had made to get those products. I must tell you that this was what helped me for the first 2 years of my business. The money I got from the business was directed back to the business. I tried to feed on other sources of income and not the money from my business. A part goes back into the business and the other was to build other businesses and I must tell you that this is what has been working for me.”

What tip did you find most useful? Please tell us in the comments!