No mistake can tank a business quicker than unfocused or undisciplined budgeting. Although many entrepreneurs refer to this blunder as overspending, what it really means is spending on the wrong things at the wrong time. Money spent properly usually results in decent and quick profits.
Business 101: Avoid These 5 Spending
No mistake can tank a business quicker than unfocused or undisciplined
budgeting. Although many entrepreneurs refer to this blunder as overspending,
what it really means is spending on the wrong things at the wrong time.
Money spent properly usually results in decent and quick profits. On the other
hand, haphazard spending will deplete your business of the capital you need to
If you are looking to become an entrepreneur, you’ll need to avoid making these
spending mistakes that can harm your business:
1. Financing with a Personal Credit Card
There will come times in the lifecycle of your business when you need more
funds than you have on hand. During these periods, entrepreneurs with
sufficient credit often make the mistake of using their personal credit cards to
make up the difference.
The interest rates on these cards versus nearly any other source of funds means
you’re shelling out far too much for that money.
Your profits, at best, cover the cost quickly and you lose vital earnings in the first
year of your business. The balance, at worst, stays put for months or even years.
This has the unfortunate side effect of accruing interest and bumping up the
amount of profit you need for your business to support you.
As a business owner, you need to separate your business and personal spending.
Use your personal funds and line of credit to pay only for non-business-related
stuff, such as groceries, utilities and a home mortgage loan. If you need to fund
your business, secure the appropriate business loan or find extra investments.
2. Attending Expensive Conferences
When you are just starting as a business owner, you may need some resources,
networking and information that retreats, conferences and seminars offer.
Although there’s nothing wrong with attending these events, many don’t notice
that they’re going overboard. They attend conferences that drain their bank
If you are going to attend conferences to help benefit