Basic Finance for Entrepreneurs
March 2, 2019
If you are an entrepreneur and want to achieve success, you must be clear about what finances are and how they work. Having control over your business and the money that is generated is paramount.
You must start by knowing some concepts to be able to handle them properly in the execution of a finance plan for your business.
- Next we will mention you the basic ones in finances:
- Capital: are all those resources and valuable assets that a business has for the production of another good, that is, your infrastructure, machinery, raw material, cash value, etc.
- Expenses: it is all that outflow of money that is paid in a consideration: salaries, payments to suppliers or distributors, obtaining raw materials, services such as water, electricity or gas.
- Cash flow: refers to the entry and exit of money in a given period. This helps you understand the growth of your business and the ability to cover expenses and other responsibilities.
- Utility: is the profit generated by your business, which becomes profitable if you have more income than expenses.
In addition to checking your income every month, it is necessary to analyze all the previous concepts. You must have a complete vision of how your SME is managing finances.
For this point there are digital tools that help to easily show your business data. Kompás is one of them, it’s free and it helps you monitor your credit history, expenses and income and the performance of your SME.
Maybe so far you have not thought about saving for your business. You can save by looking for suppliers that offer better deals or improve your processes, being more efficient can save you not only money but time. The benefits of saving for your SME are excellent, you can feel covered before any unforeseen and feel supported.
The investment returns a greater growth for business. Asking for a loan or loan can be useful when you plan to move forward. You may use your credit to compare more machinery, increase your workforce or renew your business.
Improvement always brings good results and there are options to achieve it. Do not be afraid to think that a loan could attract debts. If you handle it properly and put it to good use, your experience could be the best.