For successful entrepreneurship, financial literacy is essential for every entrepreneur.
You need to understand your numbers and accounting – to understand your business better.
Successful Entrepreneurship is about making better decisions, making fewer mistakes, and hopefully turn a little cash into a lot of cash.
Sometimes finance is not about money.
For example, how long will it take to get a customer to buy your product?
How much cash do you need to get to this milestone?
And how much do we spend on marketing in order to generate the revenues we’re looking for?
How long will it take to convert a prospect into a paying customer?
These are some of the questions that investors are going to ask you that you should be asking yourself that finance can help you answer.
Key areas of focus worth having in mind for successful entrepreneurship
If you are running a startup company here are some of the important areas for business owners and startups
Cash flow management is vital for successful entrepreneurship:
Most startups fail for a variety of reasons with one being the most common -running out of capital investment.
You need to be at the top of the cash flow system.
You need to know where every dime is coming in and going into.
Regardless of the brilliance of your idea, stick to your budgeting system.
Track and monitor all Spending
Being a new startup, expenses are going to come to you from all directions.
So instead of hiring a full time professional to handle the books- online accounting software are a better option as it saves you much more money and time in the long run
Limit your fixed expenses like fancy office space, fully catered meals.
Remain Optimistic but be prepared for the worst
You never know what can happen when starting a business.
Keep reserves- both personal and business. Sadly you can never be too prepared for these situations.
It all comes down to how well you handle the pressure of these situations.
Make investments even small ones count- anything is better than nothing.
Focus on Customer Acquisition
Let’s accept it- without customers, there is no business.
The sooner we figure out a channel to acquire clients the faster the business starts to grow.
Once the right channel is acquired, work on optimization in order to lower the cost.
Take it up step by step
Only having the dream to make a million-dollar business will not lead up to anything.
Work is all that pays off.
So break down the financial goals into reachable and measurable ones.
Monthly, weekly or even daily revenue goals allow you to stay on track and make the adjustments necessary for constant growth.
Knocking down little goals gives you the confidence to keep power through to your ultimate entrepreneur dream!
7 Key Measurables for a successful entrepreneurship
To ensure success in business and as a businessman, self-assessment is a sure recipe for success in the long run.
But as digitization overtakes business organizations, business practices that included retrospection and paperwork are gradually being reduced or quantified to nil.
RealBooks caters to many small organizations and hence has an in-depth understanding of its various nuances.
Merely providing accounting tools to our clients isn’t our work.
We believe in acting as a friend, philosopher, and guide advising you of how you can maintain and manage your business better.
A businessman’s work is never finished, he is always in a ‘work-in-progress’ mode.
That’s because added with the sheer responsibility of handling financial affairs.
A businessman must introspect, plan, track, and measure the ongoing performance of finance as well as ideas through the business exchange.
With our experience in building accounting software and providing accounting services to so many companies.
We have just listed a few pointers to follow, to ensure continued success at your work-place:
Quantify whatever you can for a Successful Entrepreneurship
Something that can be measured, can be achieved.
If something cannot be measured, it is very difficult to understand if you have been successful at achieving it or not.
Whether it is profit margins, sales, customer retention, customer satisfaction, lead conversion, salesman targets, etc.
You must set targets for each and every different parameter
And only then can you measure whether you have achieved what you set out to do.
It could be as simple as – “Retain 80% of customers y-o-y / Convert 15% of all online leads / Work at profit margins of 30%”
Break One Arrow at a Time – Set Priorities
Setting targets is the easy part.
And once you set out to achieve them, you would wonder which direction you should be running in.
Remember, as small organizations, with limited resources, it is not possible to achieve everything.
Hence, you need to create a priority list, ensure that you, and then set out to achieve what you did.
Don’t ignore financial statements
See how much money your business is generating.
With the right amount and assessment, you can continue pursuing your entrepreneurial dreams.
But before that, you need to track at regular intervals how much money is going in and out of your business?
To ensure the above, you must have a serious, detailed, and, regular look at the financial statements of your organization – balance sheets, income statements, cash flow statements, etc. in a small company to start with.
While balance sheets depict the health of your business.
The income statement helps measure the profitability of your business in a given period of time.
Also, the cash flow statement reflects how healthy your liquidity is.
Hear What Your Customers are Saying
While it is humanly impossible to keep a track of all customer mentions of your business.
You can still have an insight into the metrics through digital tools like online forums, social media mentions, and so on.
You can even record discussions surrounding your brand through various online marketing tools.
Make sure you routinely browse through the statements, figures, and trends.
This will not only help you improve but provide new ideas for business growth.
Along with this, review comments and ratings of your products/services to resolve any issues that could become an obstacle to your online reputation.
Understand the Power of Client Retention
The number one rule and formula for Successful Entrepreneurship in business are to understand client retention.
Genuine and loyal customers are the best friends for life for any organization.
These are people who generously rake in referrals, continuously contributing to gains at your business.
They increase your business prospects, so do take note of your retention rates.
Customer Retention is tougher than client acquisition since this requires your product/service to deliver day in – day out.
Also, remember, customer acquisition is much more expensive than customer retention.
Hence it’s an absolute no-brainer to focus on delivering quality to ensure happy customers who keep referring to more and more customers.
Competition is Key – Differentiate your product/service
Unlike your personal life, comparing yourself to others is welcome in the business world.
If you want to climb up the ladder, you must bank on a little competitive stance to set effective goals for your business.
Analyze how your product/service qualifies against its competitors when it comes to staying on top of the trends.
There must be 1-2 aspects on which your product scores over the competition.
In the same way, competition might also be scoring over you in some aspects, but that’s fine! You know what your USP is market that.
Visibility is the First Step Towards Profitability and Successful Entrepreneurship
You have heard this several times – “Jo Dikhta Hai, Wo Bikta Hai”.
Nothing could be more true for your product.
Hence, ensure that your product gets maximum visibility – only then this be sold.
Once it got several sales, then automatically, you have a credible customer base, which will keep referring you and making your product and company highly profitable.
As they say in BNI, a global networking organization – Visibility + Credibility = Profitability
Depending on your budgets, you could target online and offline media platforms – Facebook, Twitter, Instagram or Advertisements, Billboards, etc.
But selecting this is a fine strategy for which you must do enough due diligence before putting the buck out.
Each rupee spent must be towards some measurable benefits either in the short term or long term.
So if you are lagging behind, it’s about time to start!