5 Financial Tips that First-Time Entrepreneurs Must Know

In the Philippines, it’s quite common to hear your friends and family suggest for you to start a business to keep income flowing. It’s sound advice, as starting a business gives you a bit for financial freedom with however you would like to spend your money in ten years or longer. The country’s economy also favors small and local businesses now more than ever, signaling a much more forgiving time to try your hand at running one of your own.

While it’s encouraging to get your Tita’s vote of confidence with your cooking skills that are enough to start a restaurant, there’s probably a huge reason why you’ve been putting off this idea: the fear of setting up a business.

It’s true; it can be overwhelming in the beginning. You may think that you don’t have the necessary resources ready to start, you could be thinking twice about the risks involved, or perhaps you don’t have enough knowledge about the ins and outs of managing a business. All of these are understandable and valid concerns.

Thankfully, you can educate yourself about all the things you need to know before you take the plunge. It’s doable these days to set up small businesses that don’t require a lot of capital, so the misconception of having a lot of money before you can begin is already thrown out the window.

Here are some financial tips for first-time business owners.

1. Know where every peso is going

Budgeting is an extremely crucial part of your business plan, even if you’re not spending on operating costs yet. You should be able to assign a budget per area, project the trends of your business costs, and set contingency plans just in case you go over budget. Consider every scenario that could happen, as it’s important to think quickly on your feet once your business is up and running.

Once you begin operations, managing your money will not only keep you from going bankrupt, but it will also allow you to reach those target profits faster. Over time, you will be able to adjust your budgeting and give proper allocations to the areas your business needs the most.

2. Prioritize your expenses in the beginning

It’s normal and highly motivating to have a vision or work towards a goal with your business, such as renting out huge warehouse space, getting an office in a prime location, and a lot more. However, at the start, it would be much better to focus on the heart of your businesses: excellent service and quality products. Make sure you’re racking up sales and are continually improving on your products so that you build a loyal customer base. Once you feel the need to expand, you can begin checking off the other items on your list.

3. Scout for reliable suppliers

Finding reputable suppliers who are honest with their pricing and service quality can be challenging to find. If you have friends or family members who already run a business, don’t be shy to ask help for referrals from them.

If you’re doing this on your own, that’s okay too. When evaluating suppliers, be thorough and ask them for sample work or a portfolio. You’re investing a portion of your capital on them, and these materials will be used to speak for your brand in terms of quality. Your goal should be to deliver the best possible experience to your customers at a price your business can afford.

4. Separate your personal and business finances

Even though all the money you will be earning is technically yours, it’s much better to separate your bank accounts for savings and business, so you can easily keep track of financial movement. This way, you can see if you are hitting your profit in your desired timeline. This also prevents you from accidentally using money from your pocket towards business expenses, thus keeping your savings safe. In the future, you can also convert your business account to a corporate account and start enrolling your staff for payroll.

5. Secure the proper permits

No matter what kind of business you have, don’t forget to register your business. You can ask assistance about this from the Department of Trade and Industry (DTI), as well as your barangay and city mayor’s office, and the nearest Bureau of Internal Revenue (BIR) branch about business requirements, taxes, permits, and so on. It helps to have your paperwork taken care of at the start so that you don’t get charged fines later on for operating without the necessary documents later on.


The Time is Now: Start your Business!

Don’t let your dreams remain dreams. It’s time to start making them happen! With enough financial business knowledge, support from your family and friends, and hard work, it’s possible for you to start your business venture today. Plus, it’s so easy to get your capital through Cashalo’s easy application process and fast loan approvals—one of the best alternative methods of getting a personal loan in the Philippines. So, what are you waiting for? Start planning for your dream business today!

 

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