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Many business owners may not realize how important it is to pay bills on time says outsourced CFO. Not only do they not realize is important, but they see paying bills late, or delaying in paying them is actually a necessary and accepted part of doing business. However, this is not the case in business owners may find that their business suffers for more than just one way when they are not paying bills on time in their business.
One of the first things that business owners should expect when they stop being able to pay bills on time, is that they start sitting that type of culture in their business. When a business owner works very hard to create the type of culture that they want to be proud of, they are literally undoing their work when they stop paying bills on time. Their staff will follow suit, and a business owner may find that they start coming in late and leaving early, missing deadlines and giving poor quality customer service. If a business owner leads by example, if not paying bills on time is one of the things they do, they are creating a culture that will destroy their business.
Something else that business owners need to keep in mind, is that not paying bills will end up costing their business more, and not just in debts that they will accrue. Outsourced CFO says that entrepreneurs may discover that it will affect their relationship with their suppliers, when they do not pay them on time. Which can end up giving a business reputation. Ultimately, this reputation of not being an integral or an ethical business owner will end up costing a business owner customers, which will negatively affect their ability to grow their business.
Business owners should also understand that if they stop paying their bills on time, if they are not making enough money to pay their bills, but it is going to happen is every month, will be harder to pay the bills that before. As more bills get left unpaid, and they starts to accrue. Therefore, outsourced CFO says that it can end up with a business owner in a pit of debt that they cannot pull themselves out of. Therefore, business owners should ensure that they are paying their bills on time every month, and if they discover that they are unable to do this, they can make the choice to change something in their business as quickly as possible to help them have the money that they need to grow their business, is that of sitting in a pit of debt that is difficult to get out of.
It is very important that entrepreneurs understand that it is important part of business to pay bills regularly and on time says outsourced CFO. Since running out of money is the second most common reason that entrepreneurs fail in business, by avoiding fixing not having enough money to pay bills, business owners are only contributing to this problem. By learning how to be more profitable, can help entrepreneurs be very successful in their business.
It is very important for entrepreneurs to understand that paying bills in a timely manner not only is a good decision ethically says outsourced CFO. But it will also help them learn how to run a successful business. Therefore, business owners should ensure that they are paying their bills on time every single month in their business, so that they can learn to have a profitable business.
The reason why business owners will learn how to run their business more effectively if they pay their bills on time says outsourced CFO, is because business owners will be able to see very early on if they do not make enough money to pay all of their bills. The answer might be in increasing their profit margin by raising the price of their products and services. Or it might be in generating more revenue, either through sales calls, a beef that advertising effort including increasing the amount of money that their spending on Internet advertising. Or perhaps the answer is in minimizing overhead. Regardless of what the right answer is for each business, business owners will only be able to tell this, if they are paying all of their bills on time every month, and if they cannot, finding the reason why.
Business owners need to understand that one of the reasons that may be causing them to not be able to pay all of their bills on time, is because they have unsustainable overhead says outsourced CFO. While there is a lot of overhead in a business, most of it does not add up to very much. For example some of the overhead of the business is utility bills, phone and Internet bills, office supplies, and bank charges. If all of these overhead expenses are added up together, they might end up equaling 1% of the entire business owners bottom line. Therefore, minimizing those expenses are not going to truly effect that entrepreneurs profit margins.
However, a business owner should take into consideration the two most expensive overhead costs that they will typically ever have which is administrative staff as well as rent. A business owner is often powerless about changing their rent on a given basis, because they are either locked into a lease or mortgage. Therefore, the only overhead that they really can affect is administrative staff. While all of the other overhead might equal 1% of an entrepreneurs bottom line, going from to administrative staff to one staff member might make a difference of 15 to 20% to the business owners bottom line.
Therefore, a business owner may not be excited about laying off one of their staff members, for the good of the team as a whole, it may be one of the difficult decisions that entrepreneur has to make in order to have a successful business.
