The Entrepreneurial Itch

The final leg that provides the foundation for a successful business is finance and administration. This area is a strong suit for me personally, as you might expect. It’s easy for me to keep accurate books, make sure bills and taxes are paid correctly, and file annual income tax returns as required. What about you?

Leg 3: Finance and administration

I can’t stress the importance of finance and administration enough. Sadly, I have watched many business fail. One of the traits they shared was lousy financial records. They had receivables so old there was no chance they would ever collect any money. They owed back taxes and had been assessed late-filing penalties and interest charges by the government. They had received many “demand for payment” letters from suppliers and, in many cases, nasty letters from their banker asking when the line of credit was going to come down.

The people running these businesses saw their dream of self-employment turn into a nightmare. Not only did their business fail, but they were often left in deep personal debt or bankruptcy as a result.

Do yourself a favor: work on your bookkeeping and financial skills before attempting to start your own business. There are several great books on the subject by Angie Mohr, including Bookkeepers’ Boot Camp and Financial Management 101.

Alternatively, find a business partner who has these skills, or accept the fact that you’ll have to pay for a bookkeeper and perhaps an accountant as well.

I’ll give it to you straight:

If you don’t focus on the financial and administrative aspects of your business from Day One, you’re pretty well doomed to fail from the start.