Not only is finance a good indicator of the health of the company overall, but it also holds an important role in managing business growth
As entrepreneurs , you probably know that the key to your success is not just driven by the number customer transactions, but also the way you manage your money. That’s why it’s important to pay close attention to how much money your company is spending versus how much it’s bringing in.
Financial expert, Sharrif Gbadamosi in an interview with #WakeUpNigeria’s Yomi shared helpful tips on how to effectively manage finances
Tip 1: Structure your business:
You have to have a clear picture of what your business is and your goals. According to Sharrif;
If anybody is running any business, you have to start with capital, but when you get that capital what do you do with it? how do you structure your business in such a way that you have a steady flow of business as well as give yourself opportunity to scale up your enterprise.
Firstly you have to look at the construct of your business. In terms of construct you are either a business that sells products or a business that sells services. If you structure your business and make sure that all the factors imputes, you end up with turnover.”
Tip 2: Invest your profit
Spending wisely in the right places will bring you the dividends that you need to grow and strengthen your business;
The problem with a lot of businesses is that they don’t understand that the profit is not to be consumed a 100%. You always have to plough the capital back into the business and also put aside some money from the profit to enable you upscale the business.
In any business you have to pay yourself a salary, you can’t just look at all your profit as money to spend.”
Tip 3: Have effective bookkeeping
Every business, no matter how large or small, must have some kind of bookkeeping system in place. Keeping exact records will permit the business owner to be on top of organizational profits and and growth. Sharrif said;
Normally every business is supposed to have accounts, you can start with the normal income and expenditure. If you have that, it will enable you know how much you have invested, how much you have spent on a daily bases.
You have to make a note on every single expense and every single income so that you will be able to track how your capital has been able to go through the month, if you have over spent and how much you are getting back.
Writing things down everyday will help you get a clear picture of your business.
Apply theses tips and watch your business grow!