This topic is one dear to my heart. Because in my less than a quarter of a century in this life, I have dabbled in more businesses than some people in their entire lives. As a student, I sold small makeup that my mom brought from “the abroad”. I went on to render services as a makeup artist. I have also sold clothes, shoes and bags, eyelashes. I’m just a real Igbo girl and certified daughter of my mother.
When I started my business ventures, I did not know what to do with my money. I would be so excited to make any sales and so I would either spend it all on acquiring new goods or on treating myself. I did not know that even as a business owner, you are only entitled to a ‘salary’ from your profit and not to splurge with all your sales.
As time went on and more businesses rose and fell, I figured out a few tips that became very helpful to me.
Start with enough capital
I know it is often advised to “Do it afraid” and start with what you have. But a business that is low on capital may crash before it even has a chance to fly. Try to have at least 3 months of expenses take care of. This way, you focus on making a profit and not using your profit as more capital.
Don’t spend prematurely
Don’t get ahead of yourself. And don’t spend on things that are not entirely necessary. Materials like business cards, signage, brand materials and flyers should be at a minimum for starters. Wait till you make actual revenue before you start to go ham on these.
Manage your accounting
As a small business, you may not be able to hire a bookkeeper. If you can, that’s awesome. If not, there are many accounting software or hardware you can use to keep track of what goes in and out of your business. Download or purchase one to record your capital and expenditures. On goods, ads, salary payment etc. also record sales. Cost and income should be well documented.
Be sure to invoice always
Send out receipts and invoices so you always have proof of sales and payments. Record this in your general accounting as well.
Be sure you give yourself a salary
Set aside a percentage of your profit for yourself as a salary. Don’t spend all your profit on a new dress or a trip somewhere. You would need to grow and scale your business. Paying yourself helps you set money aside consistently and to test the profitability of your business. It is also a storage for funds in case of unprecedented expenses.