9 rules every entrepreneur must embrace
AN entrepreneur’s version of success cannot be divorced from sound financial management says founder and chairman of Digita Global Group of Companies Kemal Brown.
The international speaker and finance coach, in sharing nine secrets on how to acquire this success, believes it can be attained if entrepreneurs learn how to properly unlock financial mastery. Pointing to a 2022 Forbes report which showed that more than 80 per cent of businesses fail due to sub-par financial management skills and gaps in understanding cash flow, Brown, while speaking at a recent financial summit, shared some tips on how entrepreneurs can remain in business, especially at this time when, “no one enters business to rack up debt or to fail”.
The techniques, which are also regarded as the cornerstone of success, are listed below.
1. Craft a financial blueprint
Crafting your economic blueprint is crucial to building a thriving and sustainable business. It’s not just a roadmap; it’s the master plan, outlining well-defined financial goals that serve as a North Star through the complexities of business ownership. Entrepreneurs are therefore urged to establish a solid foundation by setting clear objectives, enabling effective resource allocation and strategic decision-making. Viewed as a dynamic tool, this blueprint should also evolve with the business, adapting to market shifts and ensuring financial resilience as it attracts investors and stakeholders and guides them toward a common destination.
2. Master the art of smart spending
Embracing frugality in business isn’t about being stingy; it’s about being savvy and value-conscious. This approach sends a clear message to partners and vendors that your business prioritises value and efficiency â€” setting a standard that only the most confident and value-driven proposals will grab your attention. Shifting from an emotional to a rational approach in business finance isn’t just about saving money but also concerns cultivating a culture of strategic and thoughtful spending. It’s a crucial skill for any business owner navigating the intricate financial management landscape while steering their business towards a prosperous future.
3. Effective tax planning
By strategically leveraging relevant tax laws and regulations the primary objective of tax planning is to reduce, control, or defer tax liabilities. The benefits include a lighter tax burden, improved cash flow, and meticulous adherence to tax obligations. It’s the key to financial efficiency and ensuring your business has a robust and compliant stance within the intricate realm of taxation. Keep these Tax Compliance Certificate (TCC) active! It pays to pay your taxes.
4. Think beyond today
In the dynamic realm of business today’s decisions hold the key to unlocking tomorrow’s opportunities thus entrepreneurs must embrace a forward-thinking mindset. Visionary leaders emphasise the importance of strategic planning to stay ahead of the curve. It’s about responding to the present and actively shaping the future.
5. Daily finance check-up
Daily check-ins are a powerful tool to provide entrepreneurs with real time insights that are essential for agile decision-making. In a landscape where market shifts can happen swiftly, having your finger on the financial pulse enables you to navigate uncertainties with precision. It’s about more than just monitoring numbers; it’s about anticipating trends, identifying opportunities, and ensuring your business is reactive and proactive. Embracing this daily rhythm empowers entrepreneurs to steer their ventures through the dynamic currents of the market as it fosters resilience and ensures they are always one step ahead.
6. Needs first, wants later
The age-old wisdom holds: Needs first, wants later. Distinguishing between the essential building blocks and the tempting embellishments is the key to establishing a resilient financial foundation. In a world where financial storms can arise unexpectedly, prioritising essentials becomes a strategic move.
7. Direct your financial fire
This directive is clear but the fire must be directed wisely! For entrepreneurs it’s about focusing that financial firepower on what truly matters, ensuring that every dollar spent ignites mission-critical business objectives. Picture your financial strategy as a well-aimed arrow hitting the bullseye of your goals, propelling your business forward. Embrace the art of calculated risks, recognising that strategic risk-taking is not just a leap into uncertainty but a deliberate move in the grand chessboard of innovation and growth.
8. Ignore the sunk cost fallacy
Sunk costs are those irrecoverable expenditures from past decisions which often cast a shadow on our judgment and sway the decision-making process. Often blinding one’s eyes to the reality of a situation, it is important to break free from this fallacy to allow for objective assessment, one which focuses on the current prospects of the venture rather than being swayed by emotions tied to prior investments. By acknowledging the sunk cost fallacy we can emancipate ourselves from emotional entanglements with past investments as we shift our gaze towards the future.
9. Know your margins
In a world driven by the allure of revenue, entrepreneurs are urged to pivot their focus. Yes, revenue is the life force but profit margin is the heartbeat, embodying financial health and resilience. A profit-centric approach compels businesses to scrutinise each act of their financial performance, ensuring a harmonious balance between income and expenditure. By prioritising profit over revenue businesses can craft a narrative of longevity and prosperity as it’s not about the grandeur of the entrance but more about the finesse of the performance.