5 Money Management Tips for Entrepreneurs

Running a successful business takes more than a good idea. Entrepreneurs must also have good money management skills in order to make their business a true success.

To help, Tope Ganiyah Fajingbesi, author of "What Color is Your Money? Your Personalized Roadmap to Business Success" (House of Ganiyah LLC, 2013) offers five tips for business owners on how entrepreneurs can manage their money to build a successful business:

Understand your relationship with money

I advise you to analyze your behavior and unique characteristics to understand what your strengths and weaknesses are when it comes to managing money. I once read that many rich people remain rich by behaving like the poor, while many poor people remain poor by behaving like the rich, and I think there is a lot of truth in that statement. You have to realize that a business venture is like another human being, and before you can help that other person succeed, you have to understand how to maximize your own strengths and manage your weaknesses first.

Understand your spouse/partner’s relationship with money

Whether or not you like to admit this, your personal relationship with your spouse or significant other(s) has a big impact on your personal finance success or failure. It is therefore not surprising that money is one of the biggest causes of conflicts in marriages and similar relationships.

Have a clear destination

You probably wouldn’t get in your car on a journey to nowhere, and you would most likely not leave your house without a map or GPS when driving to an unfamiliar destination. So why navigate this rather unfamiliar life without a good map? Every day you set out with no clear goals to work toward is a day you are getting in your car or a plane for a ride to nowhere. The most successful people establish simple, clear and measurable goals, and hold themselves accountable to those goals.

Retail therapy is not the solution

The only thing retail therapy does is increase your problems because you get poorer and consequently add to the list of problems you were trying to resolve in the first instance. This tip may be hard to implement at first simply because of the temporary rush of joy you experience when you are spending money, but it is very important to reduce impulsive spending. When you achieve this in your personal life, you will surely be able to implement the same for your business.

Always pay yourself first

You work hard, so you should learn to reward yourself, and what better reward can you give yourself than setting aside some of today’s funds for the rainy day? Saving simply means you see yourself as the No. 1 person you have to take care of. However, your biggest barrier to maintaining a healthy savings balance is your own self; setting the funds aside is not half as difficult as leaving the funds alone to grow. You have to be disciplined, learn to prioritize, delay self-gratification and, most importantly, separate your wants from your needs in order to let your savings exist when you actually plan and need them.