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Bad Money Habits That Can Ruin Your Business

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Bad Money Habits That Can Ruin Your Business

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To be successful as an entrepreneur, good money management practice is crucial. Entrepreneurs start their business with an idea and lots of energy, however as the business gets very engaging, they start to unconsciously develop bad financial habits. Here are some of those habits and how you can break them:

Keeping one account for both personal and business funds

A lot of small business owners often make the mistake of combining both business income and expenses with personal income and expenses. This is a very bad practice as it is almost impossible to monitor your business funds and performance in general.

Solution: Get your business registered and open a business account solely for business funds.

Not keeping financial records

How do run your business if there are no records available for checks and balances? Some business owners think they can keep track of expenses and incomes in their head but thats impossible. It can never be accurate and will only lead to business decisions made based on wrong statistics. You would also end up spending more than you earn and will eventually end up in debt. Note that without financial records to back your decisions, you cannot approach an investor to request for funds.

Solution: Start keeping records so you can plan more effectively for your business. There are tools out there that help to automate your records.

Making late payments

Taking a loan and not paying as at when due is bad for your business. This affects the reputation of your business and lowers your credit score. A credit score shows your credit worthiness. Banks and investors make use of this score to evaluate the risk posed by lending money to a business and the probability of paying back.

Solution: Ensure you keep records and make repayments when due. If you are not sure of when you are to pay back, clarify with your account officer or the officer in charge.

Excluding yourself from your business payroll

You might think you are managing your funds well but in actual fact, you are not. You end up dipping into business funds with no proper structure to guide you. Therefore, it is better to set aside an amount for yourself. Besides, you are also working so you are entitled to it. You have needs and you will need funds to fulfil them.

Solution: Put yourself on your business payroll. You can choose to pay yourself bi-monthly or monthly, whichever works better for your business. This can be adjusted based on the business income.

Impulse purchases

Some business owners do not have control over their spending and want almost everything they see. Sometimes you just need to sit back and evaluate the importance of the item and if it will add value to you and your business. You need to be able to distinguish your needs from your desires. If you listen to a lot of successful entrepreneurs today, they all say you should spend less than you earn. That is your key to financial success.

Solution: To curb your spending, give yourself a certain period to think that purchase through before making a decision. Chances are that you will realize you never really needed that item.

Not delegating tasks

Every entrepreneur should know how to delegate. When a problem or task arises, you spend both time and money on it and the more you spend on one, the less you spend on the other.Consider this scenario: You spend a day doing a task that costs N5,000 when you could have just hired someone to do it and spend time on other tasks more specific to your expertise and worth much more.

Solution: Consider the time versus the money that will be spent on a task. Will it be better to pay someone to do it or do it yourself? You can hire someone to work on tasks you are not skilled enough to handle so you can spend time on other important tasks.

Forming good habits are how successful entrepreneurs achieve their goals and manage to run their businesses effectively. Avoid and break off these habits to become better with your business finances.

Source: http://635.gtbank.com/2016/10/financial-habits-that-can-harm-your-business/

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

Investors Gain N1.09bn as NASD Share Price Rises 9.1%

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NASD Exchange

By Adedapo Adesanya

The unlisted securities market closed the last trading session of the week on a positive note after it appreciated by 0.18 per cent on the back of growth in the share price of NASD Plc.

Business Post reports that the NASD Over-the-Counter (OTC) Securities Exchange returned to the bulls’ territory on Friday after it closed flat on Thursday.

NASD Plc was the major driver of the return of the bourse to the green region as its value went up during the session by N2.45 or 9.1 per cent to close at N26.99 per unit in contrast to N24.54 per unit it closed at the previous session.

As a result of this, the NASD unlisted security index (NSI) moved up by 1.32 points to 745.44 points from 744.12 points, while the market capitalisation gained N1.09 billion to wrap the day at N615.86 billion in contrast to the previous day’s N614.77 billion.

On the activity chart, there was an improvement as the trading volume surged by 34,985.6 per cent because of the 2.3 million units of shares exchanged by market participants compared with the 6,688 units transacted at the previous session.

In the same vein, the trading value rose by 17,680.6 per cent to N63.4 million from the previous day’s N356,563.60, while the number of deals witnessed a 100 per cent rise as investors carried out 12 deals compared to the six deals executed at the previous session.

At the close of trades, Food Concepts Plc was the most traded stock by volume (year-to-date) with 11.4 billion units of its shares worth N14.4 billion, Lighthouse Financial Service Plc followed with 1.1 billion units valued at N546.2 million, while Geo Fluids Plc was in third place with 1.0 billion units worth N700.1 million.

Food Concepts Plc was also the most traded stock by value on a year-to-date basis with 11.4 billion units worth N14.4 billion, trailed by Nigerian Exchange (NGX) Group Plc with 456.4 million units valued at N9.2 billion, VFD Group Plc with 10.4 million units valued at N3.5 billion.

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Economy

Naira Trades N414.73/$1 as Cryptos Bleed Heavily

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Cryptos

By Adedapo Adesanya

The Naira appreciated against the US Dollar at the Investors and Exporters (I&E) window of the foreign exchange (forex) market by 0.02 per cent or 7 kobo on Friday, December 4.

Data showed that the local currency was sold for N414.73/$1 at the investors’ window yesterday compared with the N414.80/$1 it traded on Thursday.

At the final trading session of the week, the turnover was $103.01 million as against $139.67 million achieved at the preceding session, indicating a $36.66 million or 26.62 per cent decline.

Also, the exchange rate of the Naira to the United States currency recorded a movement on Friday, though downward as the Nigerian currency depreciated by 4 kobo as it closed at N411.74/$1 versus the preceding day’s N411.70/$1.

The local currency, however, appreciated by N2.17 against the British Pound Sterling to settle at N546.26/£1 compared to N548.43/£1 it traded at the previous trading session and 57 kobo against the Euro to trade at N465.68/€1 compared to the preceding day’s N466.25/€1.

At the cryptocurrency market, investors counted a heavy loss as the new variant of the coronavirus called Omicron and hawkish comments by the US Federal Reserve that it could raise interest rates have raised serious concerns, causing cryptos to bleed heavily.

The heaviest loss was suffered by Dash (DASH), which plunged by 35.3 per cent to sell for N66,595.85. Ripple (XRP) depreciated 30.6 per cent to trade at N381.85, while Litecoin (LTC) sold for N66,595.85 after declining by 24.1 per cent.

Dogecoin (DOGE) went down by 22.7 per cent to sell at N90.29, Cardano (ADA) depreciated by 20.8 per cent to N652.82, Bitcoin (BTC) depleted by 16.9 per cent to quote at N26,800,504.20, Ethereum (ETH) equally saw a 16.9 per cent depreciation to trade at N2,100,100.39, Binance Coin (BNB) recorded a 12.9 per cent depreciation to trade at N218,577.24, Tron (TRX) went down by 12.7 per cent to trade at N48.00, while the US Dollar Tether (USDT) recorded a 0.1 per cent marginal loss to sell for N554.76.

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Economy

Crude Mixed as Market Remains Unsettled by Omicron Jitters

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Crude Oil Prices

By Adedapo Adesanya

Crude prices closed mixed on Friday, December 3 after erasing earlier big gains on growing worries that rising coronavirus cases and a new variant could reduce global oil demand.

Brent crude gained 21 cents or 0.3 per cent to trade at $69.88 per barrel while on the other hand, the United States West Texas Intermediate (WTI) crude lost 24 cents or 0.36 per cent to sell at $66.26 per barrel.

Both benchmarks declined for a sixth week in a row for the first time since November 2018.

Oil prices had witnessed one of the most troubled weeks as the market reeled from the fear brought about by the Omicron variant of the coronavirus with speculations that it could spark new lockdowns and dent fuel demand.

The World Health Organization (WHO) urged countries to vaccinate their people to fight the virus, saying travel curbs were not the answer.

Even with this, the Organisation of the Petroleum Exporting Countries and allies (OPEC+) surprised the market on Thursday when it stuck to its plans to add 400,000 barrels per day supply in January.

However, it said it will continue to monitor the market and this could make it change course if demand suffered from measures to contain the spread of the Omicron coronavirus variant.

The alliance said they could meet again before their next scheduled meeting on January 4.

Analysts noted that with the coronavirus cases rising, the US jobs report for November also didn’t help demand outlook even as the unemployment rate plunged to a 21-month low of 4.2 per cent, suggesting the country’s labour market was rapidly tightening.

US employment growth slowed considerably in November amid job losses at retailers and in local government education.

Meanwhile, in Vienna, diplomats attempting to restore the nuclear deal between Iran and world powers face substantial challenges that need urgent solutions, the top European envoy said Friday. Talks are set to resume next week.

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