Turning a great idea into a successful business requires more than passion – it needs hard work, expertise, resilience and more importantly a fundamental set of financial skills.
Most successful business owners have good financial habits. If you are worried about not having the skills needed to manage your finances, the good news is that you can acquire these skills and weave them into your everyday habits.
Here’s what it takes to be a successful entrepreneur:
1. Trust market’s validation
Every successful entrepreneur knows that a great idea may not be successful if it is not financially viable for the market.No matter how great your business idea is, if the market is not ready for it, you’ll fail. Always put the market before you and your idea. Check its financial viability and ask whether it is worth pursuing. If you feel that your idea will work but the market says otherwise, listen to the market validation otherwise your business will suffer.
2. Spend more on needs than wants
Successful businessmen have a great relationship with money. They understand that to be successful entrepreneurs, being financially stable is essential. They are extremely cautious with their spending while giving priority to the most pressing needs than frivolous wants.To become a successful entrepreneur, you need to develop good financial habits that will push your business towards growth. Form a habit of figuring out what things demands your financial attention the most and why.
3. Understand your cash flow dynamics
While your business may seem a success, your cash flow may tell a different story altogether. If there’s not enough positive cash flow, sustaining your operations may get difficult. You’ll need to figure out for how long you can maintain operations at your current levels of savings, expenditure, and income. If you don’t have this insight, you might spend money you don’t have and then get puzzled when the bills come through.4. Borrowing responsibly
When your business demands additional funds, you need to feed it with money. Taking a loan is a good move. The borrowed funds can help your business grow. But you need to be a responsible borrower.Start with your research on loans. Look at loans for which you qualify. Once you have identified the potential options, carefully go through the terms and conditions of each option.
- Will you need a secured or unsecured loan?
- How long will the approval process take? 90 days or 48 hours?
- Will you repay the loan in large monthly instalments over a short period of time, or small repayments spread over a long period of time?
Each loan is different; be sure to choose one that fits your purpose and goals.
If you are an established business, you have more room to play with – get business loans, negotiate loan terms, etc. But if you are a small business, you may not have access to these sophisticated finance tools. That’s when a personal loan for business or a line of credit can help you tide over the situation.
MoneyTap offers an unsecured personal loan for business in the form of a personal line of credit to use whenever you are in need of funds. The best part of a personal line of credit is that once approved it is available to you forever, 24/7. You can use however much you need and pay interest only on the amount you borrowed and not on the entire credit line.
5. Build great business relationships
Successful entrepreneurs are the ones seeking new opportunities to initiate discussions at cocktail parties. They are the ones who form a lasting impression on people. They understand how important relationships are to the success of the business and work towards developing long-term relationships that are mutually beneficial.You may not have all the financial skills listed above just as yet. But it’s essential to acquire these skills and cultivate them into habits in the name of the lasting financial success of your business.
Author bio
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India's first app-based credit line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life's mission to help and educate people on various financial topics, so email him your questions at [email protected].
