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E-Myth – “Why most small businesses don’t work & what to do about it”

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Outsourced CFO | Paying Bills On Time Help Business Owners Succeed

One mistake that entrepreneurs can often make in their business according to outsourced CFO is thinking that it is a normal part of business to delay or avoid paying bills on time. While this is one way that several business owners operate, not only is it unethical, but it is also a very dangerous way of running a business. Entrepreneurs can learn how to be profitable in their business, if they simply get into the habit of paying bills on time, and in full every single month.

When way that this can help entrepreneurs be successful, is that it helps them see if they are making enough money in their business every single month to pay all of their expenses. If not, by paying every bill on time every month, can alert businesses to fact early on. The sooner there able to see that they are not covering their expenses, the sooner a business owner will be able to make changes in their business to become more profitable. Outsourced CFO says that this might be learning how to increase their profit margin, or it might mean that business owners have to generate more revenue, or advertise more. Ultimately, a business owner will learn to make the changes that they need to be more profitable, the sooner they can discover if they are covering all of their expenses or not.

One mistake that many business owners may, is thinking that they will be able to fix their problem by scaling their business up. However, outsourced CFO cautions business owners into doing that, saying that whatever their business is doing on a small scale, will be doing on a large scale. Therefore, if an entrepreneur is not making money while they are small, scaling up will not fix the problem. In fact, a business owner not only to be profitable larger, that the problems will also be worse.

When business owners are able to get into the habit of paying all of their bills every month, they may discover that they have an unsustainable overhead. And the matter what costs they cut, or how much sales they have, if this is a business owner’s problem, the only real solution is cutting her overhead. Outsourced CFO says that overhead covers things like utility bills, phone and Internet, office supplies and bank charges. But the two largest expenses of overhead that a business owner will ever have is rent and administrative staff. While it can be very difficult for an entrepreneur to cut the rent, because they are typically locked into a lease or mortgage, that usually leaves administrative staff being the only one that they can affect changes to.

Business owners may not want to make the decision to lay off staff member, because they want to ensure that they are doing the right thing for their employees. However, outsourced CFO says that business owners need to consider their staff as a whole, and by letting one of them go, they can ensure that they have a profitable business for their staff in the long run.

Being a business owner means understanding what they have to do to make changes so that they can become profitable. By learning how to pay their bills on time every month, and manures can ensure that they understand if they are making money, and if not what they will have to change in their business to fix that. It may end up meaning that they have to make some difficult decisions, but learning to make those decisions will they are small, can help them once they start to grow their business.

Outsourced CFO | Paying Bills On Time Help Business Owners Succeed

Business owners need to understand that it is very important that they pay their bills on time every month says outsourced CFO. The reason why, is so that they can avoid compounding the problem, by having their debts pile up. In fact, stats Canada says that 50% of all businesses will fail within five years, and 29% of those businesses will fail because they run out of money. This is the second most common reason why businesses fail, so it needs to be considered a very seriously by all business owners.

Entrepreneurs should take into consideration that if they are not paying their bills on time every month, they will never know if they are making enough money to cover all of their expenses. What could have been very easily, is for an entrepreneur not to have enough money to cover all of their expenses. When this happens every month, outsourced CFO says that only a few months have to go by before an entrepreneur is facing so many bills, and so many debts that they cannot pay all of them. Even if they start making changes in their business then, to increase their profit, and increase their sales, it can be a problem that is impossible to overcome. Therefore, it is very important that business owners learn what they have to do in their business to avoid not having enough money to pay their bills.

Inevitably, business owners may find that when they are unable to pay their regular bills on time, they are going to start having hard time paying other financial obligations as well says outsourced CFO. Business owners may end up failing to pay their taxes on time, which is going to make a bad situation far worse. The reason why, is not only because Canada revenue agency is very ruthless in expecting that money back. But they literally have the power to go into entrepreneurs bank account and take the money that they are owed. They are also able to freeze business owners bank account as well, making it impossible to run a business until they pay what they have owed.

In addition to that, business owners need to understand that the penalties that are associated with failing to pay taxes properly are so severe, that when there already experiencing financial hardship, by being hit with these extremely high penalties, can make it impossible to overcome. This is one way that business owners find themselves running out of money in their business.

When entrepreneurs learn how important it is to pay all of their bills on time every month, they can get into this habit while they are small, and as they scale up their business, use the skills that they have developed, to help them to continue to be profitable as they grow.