Typical Money Mistakes that Can Upend a New Business

Jun 28, 2023
Typical Money Mistakes that Can Upend a New Business

While millions of new business applications are filed each year, many of those companies never get off the ground; only about half of businesses that launch each year make it to the 5-year mark. Money is often at the root of small business failure, as many businesses underestimate how much they need to get started, fail to secure the adequate funding through loans, or run out of money due to poor cash flow management along the way.

For those looking to start a new business this year, it helps to keep in mind some of the most common financial mistakes that have sunk similar business ideas in the past. Common money mistakes to avoid right from the beginning:

Not staying on budget

Your budget is a management tool and a blueprint for guiding your spending. While business budgets should be somewhat flexible and open to adjustment when necessary, they should also be comprehensive and well-planned so that adherence is not overly challenging. Going off budget is one of the biggest reasons new business owners run out of cash early on. Taking the time to create a budget that is accurate, workable, and takes into account the potential for large purchases and contingencies is worthwhile and will save money and stress in the long run.

Underestimating the competition

Early research into your competitors is important and can create better odds of business success. Good research of competition can help you choose a suitable location for your business, for example, and help you steer clear of an area that may already be saturated. If your business operates partially or entirely online, knowing what other services are out there will give you guidance on how to price your products and services and how to best use online marketing tools to reach your target audience.

Having no financial management tools

Busy entrepreneurs take on a lot of business roles single-handedly, and while managing the books may seem like one of those tasks that can “wait until later,” it really can’t. Busy people know that “later” never comes: there will always be another urgent task that requires immediate attention. Consequently, financial management often becomes an afterthought, which makes it more likely to be disorganized, inaccurate, and more expensive than it has to be. Failure to track expenses, invoice promptly, reconcile accounts, and keep payables up-to-date will lead to crippling cash flow problems and, ultimately, business collapse.

Online check printing is a helpful financial management tool for businesses of all sizes. It can work as a stand-alone for printing and mailing check payments, or it can be an add-on to other accounting and payroll software tools you already use. Online check printing through Checkeeper allows you to design custom business checks and print them from the convenience of your home, office, or remote location. If you are short on time or low on checking and mailing supplies, Checkeeper can print and mail your checks for you within the business day. All check details are automatically recorded and stored in a secure online registry for easy, on-demand exporting and hands-off record-keeping. Checkeeper integrates with the most widely-used accounting and payroll programs so that financial data is synced in real-time and kept up to date.

Having no backup plan

Emergencies come up: unexpected repairs, expensive equipment replacements, or business slowdowns caused by outside forces happen to companies all the time. While unexpected events are, by definition, impossible to predict, planning ahead for their possibility makes good financial sense. Adding into your budget a small emergency fund that will cover you in those times your spending is much more than anticipated helps cushion your business finances and protect your cash flow—and greatly reduce your own stress.

Checkeeper offers a helpful backup for those times when your accounts payable service or payroll provider suffers an outage, security breach, or disruption. Checkeeper’s easy-to-use template can step in on a moment’s notice to help you print checks for suppliers, contractors, employees, and clients so that important transactions, bill payments, refunds, rebates, and paychecks are not delayed. Checkeeper’s service can be used for as long or as short a time as needed until your regular system is back up and running.

Doing it all yourself

Handling all the work yourself can save money in some areas, but taking on too many tasks that stretch beyond your expertise or available time will end up costing you more. If bookkeeping and financial management are beyond your expertise, interest, or schedule, consider outsourcing some of the work to a professional and/or utilizing online bookkeeping services that save time and reduce errors.

Cloud-based tools can keep everyone on your team connected regardless of where they happen to be working. Checkeeper allows your business to connect with a virtual bookkeeper from afar to keep costs down without compromising efficiency and accuracy. Checkeeper was made with bookkeepers and accountants in mind, and many are already familiar with the convenience that online check printing and mailing offers clients.