Each year around this time, many of us will set New Years’ Resolutions. Perhaps you’re looking to exercise more, lose weight, or eat healthier. Or maybe it’s financially related; like saving more and spending less. Or maybe it’s a professional goal and this is the year that you’re going to stop just thinking about setting up your own business.

So many new businesses will fail within the first year so it’s important to give yourself as much of a leg up as you can. If a new business is in your future this year, you’ll need to consider the financial requirements of running a company. Failing to do so will lead to you struggling to keep your profits at the right level. You might also find that your business is less competitive than some of your competitors. So, let’s look at the key money mistakes that you must avoid with your new company. 

Forgetting To Price Check

When you are running a business, you are always going to be using a variety of different services. For instance, if you are running an industrial company, then you might need to explore a commercial fuel supplier. But before you purchase diesel drums, you should always check that the company you are working with is offering the right rates. If they’re not, then this is always going to impact the costs of your company overall. Just like you shop around in your personal life, it’s important to do so in your business. That’s not to say that you should always go with the cheapest option out there, but it’s important to compare your options!

Shopping around to find the right deal may take time and effort. But it is always going to benefit your company in the long term. 

Unpaid Invoices

Next, you should consider the issue of unpaid invoices. When you make a sale, your customer may or may not pay you right away. Often times there will be a grace period, something like 7 days or ‘net 30’ – i.e. your customer has 30 days to make payment. Unpaid invoices are becoming more of a problem for businesses as financial woes in the global economy continue. This is perhaps due to the fact that companies in general are under far more financial pressure these days. As such, they are tempting to shift the pressure to their suppliers and contracts are remaining unpaid. One of the best ways to avoid this is to make sure that invoice payments are automated. It also helps to have some sort of follow-up system in place to stay top of mind with your customers. Do these and you can guarantee that you’ll always keep up to date.

No Accounting Solution 

Businesses will have lots of money flowing out, and hopefully once up and running, a lot of money flowing in. Outside of paying yourself, your employees, your suppliers and the government in the form of taxes, you’ll also have plenty of expenses to keep up with. Having no accounting solution is not going to cut it and is a recipe for failure.

You need to hire an accounting solution in your business. Even a cloud accounting service that you need to monitor yourself will be beneficial. This is the best way of guaranteeing that costs don’t build without you realizing it. 

Low Security 

Finally, you need to make sure that security standards in your business model are high. Problems with security in your business will mean that your company is far weaker on the market overall and in serious jeopardy. If you don’t have the right security in place, then it’s more likely that your business will be the victim of a hack on the market. To avoid this, you should think about hiring an IT support team. You might also want to consider investing in the services of security professionals for your commercial property. While the threat these days is largely digital, physical security is still one of the best ways to keep your business assets protected, including your data. 

Summary

We hope this helps you understand some of the key mistakes that you must avoid completely when you are running a new company. If you fall into these financial holes, then it’s unlikely that your business will survive the first year on the market. You need to think carefully about how to keep the costs for your company under control without impacting the quality of service that you deliver to customers and clients on the market. 

Disclosure: Some links will earn me a commission.