We decided to have a look at what advice banks and other financial institutions offer for entrepreneurs. Here are a few insights that stood out:
Financial skills. Know your finances, be able to determine costs and realistically estimate sales. To do this, it is important to know your pricing structure. Essential here is the cash flow. A detailed cash flow statement gives you an overview and lets you determine your financial needs. Also, liquidity. Know what it means and how it works.
Liquidity, liquidity, liquidity - the oxygen of any company.
Risk. Unless you are able to finance your enterprise without damaging your (or anyone else’s) financial standing, there is risk involved in starting your own business. However, not all risk is reckless and the right amount of risk can pay off. Simple activities, such as creating and sticking to a budget, acknowledging and respecting the consequences associated with specific risks, and finding a way to navigate risk that works for you is worth consideration. One potential rule of thumb might be: a risk that would cause you countless sleepless nights probably isn’t worth it.
Personal finances. The whirlwind of activity that goes into getting a business off the ground is enough to ensure that one or two of the balls constantly being juggled will eventually fall. Do yourself a favour and don’t let one of those balls that fall be your own personal finances. Your ability to manage your own financial assets will help translate into your ability to do the same for your business. And never forget to keep your personal and business funds separate.