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Mistakes That Cost Your Business Money

There is nothing worse than spending years working hard and growing your business into a successful company only to be set back or even lose everything because of a stupid mistake. But, it happens all of the time, financial mistakes are a part of life, personal and professional.

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Every day, someone misses something or forgets to do something which can ultimately lead to the downfall of a whole company. Diligence is the best way to avoid this. Check things, take your time and do your research. Knowing about some of the most common mistakes can be the best way to avoid them, so here is a look at some mistakes which could ultimately cost your business money.

Not Being Correctly Insured

There are many different types of insurance, which can be complicated for small businesses. But, at the very least you need to consider commercial property insurance, liability insurance and workers compensation insurance. What you need will depend on what kind of business you have. If you are a sole trader, you won’t need it, but small business workers compensation insurance cost can save you a fortune long term if you employ staff. Speak to an advisor if you are unsure about coverage as it’s something you don’t want to get wrong.

Not Looking After Staff

High staff turnover can be costly. As can the mistakes staff make when they aren’t well looked after. Provide your employees with the training and tools they need, be flexible and listen to their concerns. Well looked after staff are proven to be loyal, hard-working, longer serving and less likely to make mistakes in their work.

Not Updating Software

Updating computer software can be expensive. But, missing out on updates can ultimately

cost you a lot more. Cyber terrorism and fraud are growing problems which could affect your business if you are not properly protected.

Hiring the Wrong People

Hiring the wrong people is another common mistake that costs people money. Spend some time on your recruitment strategies to make sure you are hiring the right people for the right jobs. Hold regular appraisals with all of your staff to ensure any ideas get ironed out as soon as possible.

Confusing Profit and Cash Flow

Profit and cash flow aren’t the same things, and failing to understand this could get you into big trouble. Cash flow is the money flowing through your company. The income and the outgoings, the money that you spend as well as that which you earn. Profit is what is left at the end of all this, the amount of money you have made.

Not Separating Business Income from Personal

You need to make sure you take a salary from your business income and that it is fully accounted for. Many small business owners go wrong by treating their business income as their own personal money. It isn’t. Pay yourself, leave the rest.

Inaccurate Accounting

When it comes to filing your tax return, any inaccuracies in your accounting could leave you with a much higher bill than you may have expected, or even facing a penalty from the courts. Take care with your accounts and get help if you need it.

Try to get into healthy financial habits from the very start, and you are sure to avoid these costly mistakes.