Five Tips to Better Money Management For Business Owners

moneypeopleAre you an existing business owner experiencing challenges managing your business? Will you like to sustain the boom and growth your business is currently experiencing?

Or perhaps you have run a venture or two in the past that did not quite turn out fine and you are wondering what you did wrong or could do better next time around? If any of these apply to you, you may actually need one or more of the lifestyle makeover tips I will be discussing in this article.

Your Relationship With Money

I advise you to analyze your behavior and unique characteristics to understand what your strengths and weaknesses are when it comes to managing money. I once read that many rich people remain rich by behaving like the poor, while many poor people remain poor by behaving like the rich, and I think there is a lot of truth in that statement.

You have to realize that a business venture is like another human being, and before you can help that other person succeed, you have to understand how to maximize your own strengths and manage your weaknesses first. A really great tool that can help you understand your relationship with money is the Money Color Quiz. Your responses to 10 short questions will help place you in one of five color categories – Green, Blue, Yellow, Grey and Red.

Green folks are the big investors in every economy; The Blues are the savers; The Yellows, the spenders; The Greys are the content: While the Reds are the debtors. Once your color is identified, you will receive advice on how to improve your relationship with money.

Understand Your Partner’s Relationship With Money

Whether you like to admit this or not, your personal relationship with your spouse or significant other(s) has a big impact on your personal finance success or failure. It is therefore not surprising that money is one of the biggest causes of conflicts in marriages and similar relationships. My advice is that you understand your spouse or partner’s “money color” as well as yours so that you can know how to successfully manage your relationship in such a manner that it does not adversely affect your own financial success.

Take for instance, Rose who runs a flower shop from her home. Rose’s money color is green, so she likes to invest her money, but her husband, Paul’s money color is yellow, so he is quite a spender. Understanding this difference can help Rose a great deal. She may need to set up direct transfers from business checking account to the business savings account, so that when Paul comes down to the basement office to entice her with the new smartphone, which they could afford from the week’s sales, she is able to show him the checking account and let him know there are no free funds for that.

Have A Clear Destination

You probably wouldn’t get in your car on a journey to nowhere, and you would most likely not leave your house without a map or GPS when driving to an unfamiliar destination. So why navigate this rather “unfamiliar” life without a good map? Why wake up every day embarking on a journey to nowhere?

Every day you set out with no clear goals to work towards is a day you are getting in your car or a plane for a ride to nowhere. The most successful people establish simple, clear and measurable goals, and hold themselves accountable to those goals. Beyond establishing goals, it is also important to have a GPS, that is, a budget that clearly states how much you hope to earn and spend during specific times. Successfully practicing this in your personal life, will surely translate to success in your business life.

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Retail Therapy Is Not A Solution

The next time you want to resolve a stressful situation with retail therapy think about the song “The Best Things In Life Are Free” because it is very true. Spending money to drown life’s stressful situations has the exact same effect that using junk food to drown emotional issues has — it will make you overweight.

The only thing retail therapy does is increase your problems; you get poorer just adding to the list of problems you were trying to resolve in the first instance. This tip may be hard to implement simply because of the temporary rush of joy you experience when you spend money, but it is very important to reduce impulsive spending. When you achieve this in your personal life, you will surely be able to implement same for your business.

Always Pay Yourself First

You work hard, so you should learn to reward yourself.  What better reward can you give yourself than setting aside some of today’s funds for a rainy day? Saving simply means you see yourself as the number one person you have to take care of.

For many of us, the biggest barrier to maintaining a healthy savings balance is ourselves; setting the funds aside is not half as difficult as leaving the funds alone to grow. You have to be disciplined, learn to prioritize, delay self-gratification and, most importantly, separate your wants from your needs in order to let your savings exist when you actually plan and need them.

So go ahead and use these tips to transform your life and your business. I am sure you, your associates and even your employees will be smiling to the bank in no time.

Tope Ganiyah Fajingbesi is an international Chartered Accountant (ACA) and Certified Public Accountant based in Washington, DC. She has 15 years? accounting and financial management experience working with Big Four public accounting firms, Fortune 500 corporations, and nonprofit organizations across the USA and Africa. She obtained a Bachelors degree in Accounting from the University of Lagos, Nigeria, and a Masters in Business Administration from the Goizueta Business School of Emory University in Atlanta, Georgia. Fajingbesi co-founded and serves as the Volunteer Executive Director of United for Kids Foundation, and writes a finance column for Azizah Magazine.

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