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Not only are some entrepreneurs not that concerned about paying bills on a regular basis says outsourced CFO. But many entrepreneurs believe that delaying or avoiding paying bills is a regular and typical part of owning and building a business. However, business owners need to understand that this is not a good practice to get into, and in fact, this type of behaviour can actually put businesses at jeopardy, for running out of money in their business.
One thing that business owners can learn to do very easily if they are paying their bills on a regular basis in their business says outsourced CFO, is seeing if they are making enough money in their business to cover all of their expenses. This might seem very simplistic, but when business owners are paying bills every month on time, they will be able to understand very easily if they are making enough money in their business. If not, they will have a few options that they can look at to help them learn what they have to do to pay all of their bills. Whether its increasing the prices of their products and services, so that they can increase their profit margin. Perhaps its increasing the revenue-generating to Woody’s in their business including ramping up their online marketing. Or perhaps, a business owner can look at their overhead expenses to see if that is the culprit.
When business owners are paying bills on time every month, though be able to see this early on in their business. If business owners have already gotten into the habit of pushing off paying bills, and not paying them on time, it may be months before an entrepreneur realizes that they are not making enough money. Maybe they never realize the problem. This can negatively impacted onto manures ability to succeed, especially if they end up failing because they ran out of money before realizing it.
One problem that business owners often have, is they think that their financial problems will simply go away if there able to scale their business up. Outsourced CFO cautions against this kind of thinking, because whatever the business is doing on a small scale, it will continue to do on a large scale. Therefore, when an entrepreneur has a business that is not succeeding financially, scaling it up is just going to make those problems worse. If a business owner skills up a business that is not succeeding financially, there just impacting and increasing the magnitude of their problems.
With how important it is to pay their bills on time, business owners should get into this habit early on. Not only can help ensure that they are making their ends meet. If they do not, they can make changes right away, and understand if that is creating the solution to their problem or not. By doing this early on of the business, can get business owners into the good habits that they need to grow a financially viable and successful business.
It is very important for an entrepreneur to understand all of the obstacles they will face in their business says outsourced CFO. According to stats Canada, 50% of all businesses will fail within five years, and three most common reasons are that a business owner will be able to find enough customers for their products or services, business owners will run out of money, and business owners will not be able to find and keep the right team. By learning how to pay their bills on time and every month, can help entrepreneurs overcome the second most common reason for business failure, it is running out of money in their business.
One problem that business owners often have if they are not in the habit of paying their bills off every month, is compounding that problems says outsourced CFO. They consistently are not able to pay all their bills, their bills are going to start accruing more and more over time, eventually creating a pit of debt that a business owner can barely be able to climb out of, if at all. The business owner does not make changes to their business to become more financially viable, these debts will continue piling up, until a business owner is forced to close their doors.
However, many business owners still are convinced that it is important that they pay their bills on time. However, outsourced CFO says that paying bills on time can help business owners avoid unsustainable margins and unsustainable overhead. How does this, is by forcing business owners to make the payment, they will end up facing the reality of whether they can afford their staff or not. And while many business owners would rather sacrifice anything, and have to let staff member go. They need to understand that for the overall greater good of their business, and the staff that remain, it is much more ethical to lay one staff member off, then to let the entire business fail.
Business owners also need to take into consideration that failing to pay their bills on time can actually impact their business as a whole. If they are not meeting their own obligations, they will lead their team by example, will then start to avoid their obligations as well. This is not the culture that a business owner intends to send, but it will be the culture they have if they are not paying their bills on time. This means that their team made start showing up late, leaving early, and failing to meet deadlines. Therefore, outsourced CFO says it is very important that business owners learn early on in their business to pay all their bills, and lead their team by example.
By understanding how important it is that an entrepreneur pays their bills on time, not just so that they can help understand their turning a profit in their business, so that they can lead their team by example, and ensure that they are doing everything in their business to become successful.
