21 Financial Intelligence Ideas for Entrepreneurs
Financial Intelligence is one of the top-rated soft skills that everyone, most especially entrepreneurs, in this digital age must acquire to thrive in the business space. It’s not enough to set up a business, source for capital and all, you need to understand how money works, and how to make it work for you.
Below are 21 Financial Intelligence Ideas that you as an entrepreneur should take into consideration to better guide your financial decisions and boost your chances of making great strides with your businesses and investments.
- Set Your Financial Goal
If you don’t have a financial goal as an entrepreneur, you aren’t financially intelligent enough. The goals you intend to reach in terms of your finance, should be the blueprint that would guide all your financial decisions.
How much revenue do you intend to generate? How much profit do you plan to make from your business or Investments? All these need to be clearly stated, even before you source for capital for your startup, sell your first product or invest your first coin.
- Create A Budget
In addition to establishing a financial goal, you also need to create a budget. This is a blueprint of how you intend to spend every chunk of your cash, irrespective of whether you are self-financing or sourcing for Investors.
The budget should cover every aspect of the business, or your investments, as it’s what would guide all your expenses for the allotted time it has been designated to cover.
- Understand the Market
As a Startup entrepreneur or existing business owner, you need to do a bit of market analysis to identify customers needs, and how they can meet it with the available resources. All these are part of the efforts you need to put in, to minimize your losses and boost your profits.
A financially Intelligent Entrepreneur, understands the impacts of his environment (which also happens to be his market) on his investments, businesses, and therefore studies the environment, in attempt to understand it and make better financial decisions.
- Carve Your Niche
To thrive in the business space, you need to carve your own market space. This helps you reduce competitors, thereby improving your customer base and boost sales.
Instagram, Facebook, Twitter and LinkedIn are all social media platforms, but all these platforms have their unique differences that defines their users, they have their separate niches, even though they are in the same environment (the same business).
This also applies to your investments, you should decide on the stocks, bonds, digital assets etc. that you want to invest in.
- Identify your SWOT
You must have heard of the SWOT system, Strength, Weaknesses, Opportunities and Threats. As an entrepreneur, you need to identify these four in your business. You should know what your strengths are, it could be your product quality or the quality of your services. Your weaknesses could be logistics, opportunities could be market location, government policies etc. and threats could be your competitors, or even your promoters.
Identifying these four major components of your business could go a long way in helping you serve your customers better and even minimize expenses.
- Study Your Competitors
You can’t afford to be caught off guard by any of your competitors, as an entrepreneur. This explains the reason you have to keep an eye on your competitors, trach what they are doing differently that could make them poach your customers, or your employees.
You don’t have to do the same thing they are doing; you just need ascertain that they aren’t doing better than you.
Most entrepreneurs are fond of sourcing for capitals from investors who are only interested in the profits the company, or business would make. This is why it’s more profitable as a startup entrepreneur, to self-finance your business to the point that it can sustain itself with its revenue.
This gives you the freedom to make your decisions and structure the business your own way, without having to consult a shareholder or investor, who’s only concerned about his investment.
- Make the Customers the Investors
Financial intelligence has changed our perspectives on how to source for capital. As an entrepreneur, you don’t need to wait till you see investors, or continue bootstrapping and exhaust all your personal expenses on the business, before you sustain the business. Your customers are your potential investors, you only need to go to them, ask them to prepay for your products or services, and if they trust you enough to keep to your words, they won’t refuse.
To do this, you would need a track record of successful transactions, that could make the customers trust you to deliver.
- Track Your Cash Flow
You should know how money moves in and out of your business, you need to keep a record of your expenses, and your revenue. This helps you in setting future financial goals and creating budgets.
- Study Economic Trends
Studying economic trends, helps you stay updated on the latest financial changes, locally and globally. This guides your financial decisions and investment plans.
- Buy Digital Assets
A lot of currencies in the world are crashing, due to the latest market changes globally, and the safest way to safe your cash now, is to acquire digital assets, cryptocurrencies.
There are many coins out there that are doing just fine, when it comes to their price liquidity and market capitalization, you can do yourself a whole lot of good as an entrepreneur, by acquiring some of these coins.
- Create Multiple Income Streams
As an entrepreneur, you aren’t expected to have just one source of income, this explains why most entrepreneurs create multiple startups. You need to diversify your income source, and have multiple streams. This helps you stay ahead of your competitors, and have enough to expand your businesses.
- Spend Less Than You Earn
This is a principle in financial intelligence, if you want your business to survive, as an entrepreneur, you need to spend less than you earn. If your expenses are more than your profits, your business won’t take too long, before it collapses, and you’ll be left with nothing.
You need to earn more, invest more, and spend less.
- Consider Insurance
You can’t accurately predict when there would be catastrophic events that could affect your business, it’s better to be on a safe side, by keep your business insured. There are several insurance packages that you can consider, and find one that suits your business.
- Work on Your Customers Satisfaction
As an entrepreneur, your customers satisfaction impacts your revenue flow, and you can’t afford to let it slide or lapse at any point in time. You should keep working on ensuring that you leave your customers satisfied at all time.
- Limit Your Debts
It’s important and sacrosanct that you don’t accumulate so much debt that could ultimately send you bankrupt or force you to sell out your business. Reduce expenses whenever you notice that your debts are compounding and work more on creating multiple income streams.
- Build Your Network
It has been established overtime in the business space, that your network determines your net worth. You need to keep expanding your network as an entrepreneur, to help your business growth.
You can organize and attend dinners, coffee meetings etc. to meet new people, and build your network.
- Promote Your Brand
Your Brand promotion should be included in your overall budget, and it needs to be constantly worked on. You can do this in several ways, it could be through e-mail, social media platforms, or printed designs. As long as it vividly explains your brand and represents it accurately, off you go!
- Have A Separate Personal Savings
You shouldn’t mix up the cash meant for your business with that of your personal savings, you need to separate them and avoid using your revenue for personal expenses.
- Hire A Financial Advisor
As an entrepreneur, you would need the services of a professional when it comes to making some vital financial decisions, to avoid putting your business or investments at risk, out of ignorance.
- Schedule Your Time
Your time is as important to the success of your business as any other resources that you may possess, and you need to guard it as possible as you can. Map at your activities for each day, and schedule the time for those activities, don’t just take the day as it comes, be in control!
All the ideas mentioned above would guide you in becoming financially intelligent, as an entrepreneur, if you apply them.
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