It shouldn’t come as a shock that I take a strong stance on the topics of “business” and “focus.” Heck, I even wrote a book called The Focused Business, which happens to be available on Amazon and makes a great stocking stuffer! *wink, wink*
What’s one sign your business is losing focus? Follow the money. Too many businesses spread themselves thin by moonlighting as a bank and failing at it. Miserably.
That’s why I carved up a hot slice that focuses on the three ways businesses fail at loaning money as well as some practical advice that you can take to the bank.
How well is your business managing money?
One area where I see small businesses fail when it comes to managing money is when they behave like a bank. What that means is that they are doing things that a bank would do, but they don’t have any knowledge about how to actually behave like a bank.
Here’s what I mean. First of all: when you issue invoices to customers allowing them to pay in thirty or sixty days but you do not have a line of credit. Go out and get a line of credit if you are going to invoice. That way, you can let the bank absorb the risk of the up and down when it comes to people repaying.
Second of all: when you give a payment advance to your employees. Rather than do that, make sure that you invest time in educating your employees about how to better manage their own finances.
And third: when you make a loan to yourself from the business. No, keep the two separate and instead, either go to the bank to get a loan or give yourself a raise.
Now I’d like to hear from you. What’s one of your favorite money tips to help businesses succeed?
Also if you have any question you’d like me to answer in a future video, go to: davecrenshaw.com/ask
Thanks for watching and may you let the bank be the bank.
Join the conversation: What’s one of your favorite money tips to help businesses succeed?
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