moonchild
VIP Contributor
One of the reason most people get involved with small business is staying cash liquid and profit positive.
Because with small business, the capital is often not large and customers are recurring, think about a small food restaurant or a street snacks vendor, they are all tight on capital and they almost sell their products everyday.
Separating capital and profits has to be taught to avoid financial error which are prone to happen in those type of businesses.
1- Protect the capital first: Capital should always be protected, because without it, it'll be hard to stay in the business, not possible even. It is like losing your stake in a casino, you'd have no option than to go back home.
2- Keep Records: Keeping records is not common in small business, after all they are small and they don't have the resources to hire a record keeping assistant, but nowadays, due to the evolution of technology, we have simple record keeping softwares that can keep track of your expenses, some of them are MS Spreadsheet, TrackExpenser etc.
3- Stay Away From Debtors: Small business owners will agree with me on this because it's one of the ways that small businesses get crippled, debtors will always be there, they want everything on credit with a promise of paying later, which most don't, before a small business owner should issue out a credit, assess the credibility of the person, because once you hand out your service or product then you're at there mercy
Because with small business, the capital is often not large and customers are recurring, think about a small food restaurant or a street snacks vendor, they are all tight on capital and they almost sell their products everyday.
Separating capital and profits has to be taught to avoid financial error which are prone to happen in those type of businesses.
1- Protect the capital first: Capital should always be protected, because without it, it'll be hard to stay in the business, not possible even. It is like losing your stake in a casino, you'd have no option than to go back home.
2- Keep Records: Keeping records is not common in small business, after all they are small and they don't have the resources to hire a record keeping assistant, but nowadays, due to the evolution of technology, we have simple record keeping softwares that can keep track of your expenses, some of them are MS Spreadsheet, TrackExpenser etc.
3- Stay Away From Debtors: Small business owners will agree with me on this because it's one of the ways that small businesses get crippled, debtors will always be there, they want everything on credit with a promise of paying later, which most don't, before a small business owner should issue out a credit, assess the credibility of the person, because once you hand out your service or product then you're at there mercy
