Search
Close this search box.
Blog » Money Tips » 5 Money Mistakes Small Business Owners Make

5 Money Mistakes Small Business Owners Make

Mistakes Small Business Owners Make

We all make mistakes with our money. Even as business owners, it’s possible to make money mistakes that can add up to a big difference in your profits. Before you get too far into your business, look around at some of the things you might be doing that lead to money mistakes.

As you move forward with your small business, here are 5 money mistakes to try to avoid:

1. Spending Too Much to Start Up

When you first start a business, it’s tempting to think that you need just about everything. You want to buy all your equipment and it’s tempting to buy extras to make your office cool.

However, there is a good chance that a lot of the things you buy as a startup are not necessary. Instead of spending a lot of money up front, look for ways to save money. Sometimes this means waiting to make certain purchases until you have the available capital. No matter how much you got it for a business loan or startup capital, you need it to be careful about how you spend.

2. Missing Tax Deductions

Some business owners don’t think it’s worth it to save receipts and claim deductions for small expenses. However, over time those small expenditures can add up. A few bucks here and there may not seem like a lot, but over time it can make a difference.

It’s not just expenses, either. You might miss tax deductions and credits available for hiring certain people or providing certain benefits. Make sure to review your expenses each year and save your receipts so that you can take the tax benefits to which you are entitled.

3. Lack of a Cash Cushion

Many business owners understand that they may operate on a shoestring for quite some time. However, this can lead to one of the biggest money mistakes, which is to neglect building a cash cushion.

Your business needs some sort of savings back up so you can keep in business even when things are tough. You should also try to get some sort of line of credit or financing that can help you maintain that liquidity so your most important expenses can be met.

Don’t forget to build a personal emergency fund as well so that your personal finances can make it through tough business times.

4. Too Much Too Soon

When you first see some success with your business it is tempting to immediately branch out into something new. However, this can be one of the major money mistakes entrepreneurs make. You might want to launch a new product or provide a new service once you see how successful your original idea can be. Unfortunately, branching out too soon can be costly. Make sure you are solid before you diversify into new offerings.

5. Being Busy Instead of Productive

Sometimes we wear our “busy-ness” like a badge of honor. However, we often don’t stop to think about whether we are really accomplishing something. It’s also common for business owners to get bogged down in mundane tasks. This is can cost you money in the long run.

Instead of trying to look busy or feeling like you have to do everything, make it a point to delegate. Focus on the most important tasks that will provide you with better profits. You will waste less money and be more successful over time.

About Due’s Editorial Process

We uphold a strict editorial policy that focuses on factual accuracy, relevance, and impartiality. Our content, created by leading finance and industry experts, is reviewed by a team of seasoned editors to ensure compliance with the highest standards in reporting and publishing.

TAGS
Credit Expert
I’m Miranda and I’m a freelance financial journalist and money expert. My specialties are investing, small business/entrepreneurship and personal finance. The journey to business success and financial freedom is best undertaken with fellow travelers.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Categories

Top Trending Posts

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More