6 Killer Money Mistakes Start-Ups Make.

Money is a powerful tool for business success. Without money a business venture becomes choked out of existence. An understanding of the role of money in a business should inspire prudence especially to a  startup. Brands are most fragile and vulnerable at the early stages of their existence and financial mistakes can have a far reaching impact on them. Some newbies in business have made some  money mistakes that outrightly sank their business. Popular among such killer money mistakes startups make are : 

 Spending too much on  office rent 

Many startups believe a big and luxurious office is a clear representation of the audacity and size of a business vision. In their thinking a big office equals a high corporate image. This misconception has misled many startups to commit a huge amount of their capital on office rent in order to make an impression.   However,  a luxury office space could become a big  liability that threatens the very life of a business unless its translating into more revenue.. Flamboyant office at the expense of business fund is folly.  It is better to have a lean office and have a fat operational bank account to run the business than get cash trapped. Most of the big tech brands we know today started in unbelievable low profiled offices including home garages.  Apple for example started in a car garage.

Loan diversion

A lot of entrepreneurs beat all the odds to earn a much deserved financial loan but end up diverting it to other interests. Fair enough, some of the diversion is aimed  at businesses that promise big and quicker returns as opposed to the original intentions of the loan. The danger is that most of the diversion plans are not quite thorough in their evaluation and often constitutes a huge dangerous trap to startup. People who give loans build their tracking strategy on the initial idea they bought into. When you change it half way into the process,you come across as inconsistent, lacking in integrity thus casting a lot of doubt on the business.. This is where you don't want to be as an entrepreneur. Integrity is the currency of business success. Those who lose it ultimately fail..

Not respecting business fund

Most startups are a one man team. They wear many hats.  They are the front desk officer ,the administrator,the marketer and the accountant. For most entrepreneurs ,there is often no clear separation between personal  and business funds. When there is a conflicting urgent need between business and personal need , it is almost always breached in favor of the entrepreneur's personal  need. When consistently so,  it results in serious disruptions in business operations leading to severe setbacks and sometimes outright business liquidation. Personal and business funds should never mix. 

Not having a budget

A budget is a tool for controlling finacial activities. A well considered budget is a compass for a successful financial operation. A budget helps an enterprise track her money. It helps the startup identify opportunities for investment, it helps the business to save and to spend wisely. A budget puts you in touch with the realities of your business money. The absence of a budget means the absence of order and clarity in financial decisions. No business can survive a persistent financial disorder. Without a budget, scarce funds are wasted in things that dont count. Things that matter most will be sacrificed for things that matter least. A start up should insist on a budget driven enterprise.to thrive. Anything outside of it is a recipe for business failure.

 Allocating little or no money for  personal development.

Rapid change, informed competition, and economic recession have changed the dynamics of business, thus making brand success a tougher call. Leaders are often pushed beyond their current capabilities and require new skill sets.  A personal growth plan for a CEO is about developing a system of continuous learning that is aimed at helping him reach full potential. You are your business's greatest asset.. Your business growth experience is  always  proportional to your ability to maximize your personal potential. Continuous personal development is the key to unlocking your personal potential. If you remain as you are, your business will never flourish.  Personal development is more than just working on the talents you already have. It’s about developing new skills, so you become even more valuable to a business. 

Spending too little  on promotion.

Without sufficient sales a business sinks.  Without product awareness  nobody buys. If your business is not selling,it is dying. There's no in-between. A good product is not a recipe for success. A good promotion is.  No matter how Great a product is,if  nobody is aware of  it,no one buys it. Getting the word out there is as important as having a great product.  Many entrepreneurs spend so much money except on promotions- the very thing their business depends on to survive. The real difference between a struggling business and a thriving one is their budget on promotion. Sales numbers are driven by reach. It begins with  the level of awareness the product  has with prospective customers. Buyers need to  be aware your product exist before contemplating buying it. When you spend little on awareness and sales campaigns, the prospect of reaching higher market share diminishes significantly. Many experts believe that the highest expenditure after staff remuneration should be on promotion and this has not been proved wrong.