Did you know that 95% of Small Businesses don’t make it past their first 5 years?! Here is a summary of 3 mistakes which I believe are pivotal to their demise:
1) Not keeping records
Keeping records especially of business outgoings and incomings, helps business owners plan better. Not having records means that the business keeps making the same mistakes all the time which can be very costly.
2) Not having a separate bank account for business activity
Mixing personal expenses and those of the business create a reconciliation nightmare when preparing tax returns at the end of the year. In most cases you find that the business owner has not set aside money to pay tax. It is the tax arrears and penalties that eventually lead to collapse.
3) Not paying yourself as a business owner
If you’re not disciplined to pay yourself and separate your money and the businesses’ money, then It is easy to constantly draw cash out of the business for personal use. This could result in a a cash flow problem for the business which could lead to bankruptcy.
Do you currently make any of these mistakes in your business?
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