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Common Financial Mistakes Business Owners Make—and How to Fix Them

Common Financial Mistakes Business Owners Make—and How to Fix Them
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Like many business owners and entrepreneurs, you most likely started a company because you saw a market need or problem and were armed with the passion and expertise to meet that need.

However, many of the most common financial mistakes happen early on in a business when time and resources (i.e., cash flow) are particularly tight. You might be determined to overcome obstacles yourself and learn things on the fly, and though this approach sometimes works, it may cost you in the long run.

Business growth can also expose and exacerbate infrastructure problems because it’s a careful balancing act between hiring talent, investing to increase efficiencies, and supporting increased expenses with additional sales. Putting too many resources in one over the others can bring the business down. The answer? Plan financially as much as you can, and be aware of the most prevalent mistakes business owners make when it comes to money.

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Common Mistakes Business Owners Make with Their Finances

Hopefully, you have experience creating a personal budget—managing known expenses like your rent or mortgage and unforeseen expenses like car repairs that pop up from time to time. With your personal budget, the more you can forecast and prepare for the worst, the better off you will be.

The same is true for financial planning for business owners. And although some things will change the minute after you make a plan, a forecast will help you keep balanced books and set yourself up for success. As you build your business financial plan, you should also keep in mind some of the most common mistakes business owners make with their finances.

If you see any of these in your own organization, a swift correction should be your top priority.

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1. Failure to plan for worst-case scenarios 

You never want to think about how your family would cope if something should happen to you, but as a business owner, it is critical to have estate documents that include your will, powers of attorney, health care documents and possibly a trust. All your assets should have the appropriate titling and beneficiaries, and you should have adequate life insurance and disability insurance, as well as an emergency fund in place should you become ill, incapacitated or worse.

Your business is a large part of your life, so you’ll also want to plan for a worst-case scenario from a business perspective. Make a business continuity plan that covers where to find important documents; a list of individuals like accountants, attorneys, and customers to notify; and other things that would be helpful for a successful transfer of ownership to your beneficiaries. Although estate planning is not something most people like to dwell on, it ensures your business is taken care of—the way you want it to be—after you’re gone.

2. Lack of understanding of how to manage cash flow and working capital

Business owners often focus on generating sales but still find themselves tight on cash. Managing accounts receivable (AR) is one of the most important aspects of having a successful business. Before opening your doors for the first time, get an idea of the average AR benchmarks for your industry. This information will help you decide how to manage cash flow. Working with vendors who have extended terms—that potentially align better with your AR timelines—can also help.

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Because business growth requires capital in order to support payroll, AR, inventory and more, it is a good idea to establish cash flow forecasting models. These estimates are generally prepared every week and project expected inflows and outflows over a 90-day period. This helps determine whether a working line of credit could be useful to establish or whether finding other sources of working capital would be beneficial.

3. Failure to mitigate risk

Plenty of businesses struggle or fail due to both predictable and unforeseen losses. To help mitigate these, have an insurance professional help you evaluate the different types of exposure you have and determine what can reasonably be covered by insurance. For losses that cannot be insured or cannot be insured on a cost-effective basis, you should decide how best to protect against the possibility of a financial loss.

Extending credit to a customer, for example, opens up the potential for nonpayment, so decide whether it’s a good idea. If it’s necessary, you’ll have to then decide how credit will be approved and monitored. From an employee standpoint, put processes in place to reduce the risk of being taken advantage of. Give prepaid gas cards, for example, instead of company credit cards for gas. Monitor expense accounts and let employees know they are monitored to ensure your finances are in a good place. When dealing with people, it’s always a good idea to “trust but verify.”

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4. Trying to go it alone

Business owners are often independent, driven problem solvers. It’s a great recipe for starting a business, but it can also lead you to try to do everything on your own, including tasks that you aren’t necessarily well-suited to perform.

If you’re a creative, right-brain thinker, for example, you might be a passionate product designer or marketer. The analytical, numbers-based side of the business may not come naturally to you. This can lead you to getting bogged down with numbers. Finding someone to look after items like payroll and AR in addition to your retirement fund, whether it’s a SEP IRA, SIMPLE IRA, or solo 401(k), can be extremely beneficial for both your peace of mind and bottom line.

Start with an honest assessment of both the areas you excel at and any shortcomings you might have. With an accurate picture of your capabilities, work to assemble a team that complements you and plugs any gaps. An advisory board can also be helpful to spot new ways of doing things, challenge the status quo, and create efficiencies in the business.

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Running a business is a difficult endeavor, and you can’t expect to get everything right all the time. However, although you can easily recover from certain errors in judgment, some common financial mistakes can quickly ruin a business if left unchecked. As you work to protect your own organization so you can keep your doors open for years to come, prioritize financial well-being and quickly rectify any of the mistakes mentioned above.

Disclosure: This material has been prepared for informational purposes only and should not be used as investment, tax, legal, or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal, and accounting advisors.

written by Sara Gelsheimer @ Success.com

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Glusea.com is an online website designated to publishing information that will help inspire and motivate high achievers. We believe that every individual live his/her life based on the amount of information about life available to them. To this end, we strive to publish success stories of Accomplished individuals around the world as way of motivating others. we also give tips on how to succeed in any field. If you are someone who aspire higher in ;life, visit Glusea.com daily and you will be abreast with all the latest trends about success here. welcome to the Glusea family.. we love you dearly contact us via email : gluseagh@gmail.com

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Dwayne Johnson Cars and Houses

Dwayne Johnson Cars
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Dwayne Johnson cars and houses: Dwayne Johnson who is known popularly by his ring name, The Rock, is a former wrestler and currently one of the most successful Hollywood actors.

With over two decades of experience both in acting and wrestling, Dwayne Johnson has garnered a lot of plaudits and has established himself as a fan favorite both during his wrestling days and in his acting career.

Born on May 2, 1972, Dwayne Johnson, prior to becoming a professional wrestler was a former Canadian and American football player. 

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Dwayne Johnson was on the wrestling ring for eight years before switching his career focus to acting. Since he began acting, Dwayne Johnson’s movies have recorded a commercial success, grossing over $3.5 billion in North America alone, and $10.5 billion globally. 

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Richest Actors in the world

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Dwayne Johnson net worth

You wouldn’t be wrong to co aider him one of the most successful and most prominent Hollywood actors in history. Dwayne Johnson also charges about $20 million per movie which explains why he is one of the richest and highest-paid Hollywood actors in the world. 

With so many awards to his name, both in wrestling and acting, Dwayne Johnson has used part of his millions to acquire some of the most expensive cars and houses to afford him the life of luxury worthy of someone of his status. 

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This article will be considering some of the expensive and luxury Dwayne Johnson cars. The Hollywood star also owns several houses. 

Dwayne Johnson Cars

Dwayne Johnson Cars
Dwayne Johnson Cars and Houses 32

Pagani Huayra-$2.6 million

 

One of the best of its kind, the Pagani Huayra is one of the fastest sports cars owned by Dwayne Johnson. It is also the most expensive ride in Dwayne Johnson cars collection. 

The Pagani Huayra is built with a Twin-Turbo 6.0L V12 engine type, capable of reaching a top speed of 236 mph with a 730hp power. These features explain why it is regarded as one of the most expensive cars in the world. 

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It has the ability to accelerate from 0-60 mph in 2.2 seconds little owned than that it is also ranked one of the fastest sports cars in the world. 

Ferrari LaFerrari-$1,416,362

It is no longer a doubt that the famous wrestler and actor has a great taste for Superfast cars as he has also included the Ferrari LaFerrari in his car collection. 

A luxury car with a sleek design and very portable in size, the Ferrari model is built with a 6.3L V12 Hybrid engine along with a 7-speed automatic transmission. 

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The luxury has the ability to produce a power output of 950hp and can accelerate from 0-60 mph in 2.5 seconds at a top speed of 217mph. 

 Ford GT 2017-$450,000

The love Dwayne Johnson has for the Ford model is unmatched. Produced by Henry Ford, the Ford GT is built with a 3.5L twin-turbocharged V6 engine mates with a 7-speed automatic transmission along with a power output of 450hp.

The Ford GT is also similar to its counterpart, the Ford F50 which is designed with a Carbon Fibre body. 

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Lamborghini Huracan-$261,274

The Lamborghini Huracan with a price tag of $261,274 is another expensive ride among Dwaynwe Johnson cars.

Being a fan of fast and furious rides, Dwayne Johnson sure cannot ignore the Lamborghini Huraycan and that’s why he has acquired the luxury sports car to add to his collection. 

The Lamborghini Huracan is an exceptionally comfortable ride for a luxury car with an amazing sound from its 5.2L V10 engine capable of producing 572.6hp power output. 

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Rolls Royce Wraith-$300,000

If you are a celebrity and do not have the Rolls Royce Wraith in your collection then there is something wrong. “The Rock”, as he is often called, has made sure to include the luxury car for kings in his collection. 

The Rolls-Royce Wraith is a two-door Coupe ride built with a 6.6L V12 twin-turbocharged 8-speed transmission. 

The Rolls Royce Wraith is also another one of Dwayne Johnson cars, it has a price of $300,000

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Plymouth Prowler-$43,000

The Plymouth Prowler car is powered by a 4-speed automatic transmission with a V6 engine which is capable of moving at a maximum speed of 115 mph. It can accelerate from 0-60 mph in 7.1 seconds. 

Chevy Chevelle 1971-$72,900

Dwayne Johnson also owns the luxury ride along with his fellow actor Vin Diesel. Built with a V6 engine capable of producing a power output of 155hp.

It is capable of moving at a top speed of 162 mph and accelerates from 0-60mph in 6.1 seconds. 

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Cadillac Escalade- $76,195

The luxury SUV is also among the collection of the Hollywood star Dwayne Johnson. It comes with a Cool-looking digital cockpit interface along with a large rear cargo space and with fascinating in-cabin storage. 

Ford F-150-$56,190

For someone like the rock, you can expect him to acquire the gigantic ride to suit his nature. Designed with a 2.7L twin-turbocharged V6 engine, The F50 is capable of producing a power of 325hp and is one of the cars he usually drives around with. 

Dwayne Johnson Houses

Dwayne Johnson Houses
Dwayne Johnson Cars and Houses 33

Dwayne Johnson reportedly owns a $27.8 million mansion situated in Beverly Park, Los Angeles’ most exclusive neighborhood which also houses other famous Hollywood stars. 

He previously owned a $5 million mansion located at Hidden Hills in California which he later sold in 2012.

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Glusea.com is an online website designated to publishing information that will help inspire and motivate high achievers. We believe that every individual lives his/her life based on the amount of information about life available to them. To this end, we strive to publish success stories of Accomplished individuals around the world as a way of motivating others. we also give tips on how to succeed in any field. If you are someone who aspires higher in; life, visit Glusea.com daily and you will be abreast with all the latest trends about success here. Welcome to the Glusea family.. we love you dearly contact us via email: gluseagh@gmail.com Copyright © 2021, Glusea