We’ve probably come across tons of entrepreneurial books that speak about the daily habits one should cultivate for success. Not to mention, the many podcasts and articles that are available out there on the internet.

However, rarely do we ever stumble across their financial habits. So how exactly do these entrepreneurs prepare for financial obstacles or manage to keep their business afloat? We’ve taken some time to put together 3 good financial habits successful entrepreneurs own! Hopefully, by the end of this article, you’ll learn a thing or two that could be beneficial to you!

Without further ado, let’s dive straight into it.

01

Reviewing Finances Regularly

A common financial habit that many successful entrepreneurs share is the practice of carrying out regular finance reviews. When you do this, you’re constantly up to date with what’s happening financially – giving you a better overview of when and where to place your money. Every business has its own cycle of income and expense. If you’re in advertising, your cycle may be influenced by the duration of a project or contract terms. However, no matter what industry you’re in, the key to manage finance is to start setting a mix of short-term and long-term financial reviews to help you conduct your business better.

Short-term reviews should be conducted weekly or monthly. These sessions often help entrepreneurs understand the frequency of their business operations. They take this time to assess and address immediate or potential financial risks. As an example, your monthly review could point out an expense due to an event that you’ve overspent on freelance services. As such, you may want to take quick measures to rectify this before it becomes a major problem.

Long-term reviews, on the other hand, are typically carried out on a biannual or annual basis. These reviews are crucial for entrepreneurs to evaluate the overall scale and direction of their businesses, as well as to plan for the future.

02

Set a Budget for Taxes

Yes, taxes. We may not like it but it’s compulsory. Think of taxes as your debt to the government; it is an accumulated amount that you must pay at the end of every annual tax cycle. With that being said, successful entrepreneurs often pre-allocate a sum of money for their business taxes. Generally, entrepreneurs are advised to collect at least 90% of their previous tax payment by the time the new tax season rolls around. Try allocating a certain percentage monthly to avoid scrambling for funds at the last minute. In this scenario, a budgeting sheet will come in handy, as with it, you’re able to monitor how much more you have to put aside and for how long!

03

Pay Off All Your Debts

As business owners, loans are almost inevitable. There are many reasons why you would need to borrow money from a bank at some point, you could be applying for a loan to start your business, to buy assets or to expand. This brings us to one of the most important habits – paying off all your debts. While it’s the utmost exciting phase to see everything come together, it’s also very crucial to manage your debts especially when interest rates tend to compile each time you skip a payment. Interest payments can quickly total up to a substantial amount and if you continue to not pay attention to it, it could potentially harm your overall business budget. Therefore, it would make the most sense to carry out consistent payments and proactively find ways to reduce the principal amount as soon as you can so you can continue to focus on what matters!

There you have it! 3 good financial habits to cultivate. Undoubtedly, it can be a bit of an uphill climb to become a great entrepreneur, but when you adopt some of the financial habits mentioned above, you are already on your way there. Although it will take time and a fair bit of self-discipline to develop these habits, your success at the end of the day is well worth the effort.

We hope this article has brought great value to you. If you think that this was helpful, share it with a fellow aspiring entrepreneur. Who knows, it might help them too. Good luck!