Want to know the difference between successful entrepreneurs and everyone else?
Financial habits.
Entrepreneurs who have their financial ducks in a row work far less than those who don’t. They’ve built systems to handle their business finances so they can focus on what they love… growing their business.
And the results show.
Most entrepreneurs work too much. They’re tired all of the time. They’re behind on invoices. They worry about money.
You don’t have to be that entrepreneur.
If you know exactly what bills are coming in and when you’re going to pay them, you have more time. More energy. You can spend your days focused on building your business instead of putting it out.
Here’s how to build your financial framework…
Table of contents
- Why Cash Flow Is King
- 4 Financial Habits Successful Entrepreneurs Actually Have
- Tracking Money Like A Smart Entrepreneur
- Final Tips: Automate Your Financial Systems
- Wrapping Up
Why Cash Flow Is King
Bad cash flow sinks more businesses than anything else.
In fact, statistics from US Bank reveal that 82% of failed businesses attribute their closure to cash flow problems. Yeah, you read that right. Eight-two percent.
Sound about right to you?
If cash isn’t moving into your business when it should and being paid out to others on time, your business doesn’t function. Your payroll can’t get cut. You can’t grow.
Successful entrepreneurs know this.
They breathe, sleep, and live cash flow. They watch that spreadsheet like a hawk. Successful entrepreneurs send invoices quickly with billing software for small businesses and get paid even quicker.
Many don’t realise that…
Sending invoices through an invoicing app is powerful. It allows you to be in control of when your clients can send you money. Successful entrepreneurs don’t let their clients pay whenever they feel like it. They tighten up that invoice process so the money hits their bank account sooner.
4 Financial Habits Successful Entrepreneurs Actually Have
Successful entrepreneurs don’t leave their financial success up to chance.
They have daily financial habits that protect their businesses:
- Track your money obsessively. Expenses, sales, outstanding invoices… everything.
- Send invoices immediately. Don’t wait until the end of the month to catch up on them.
- Separate your personal and business finances. Seriously. Don’t mix them at all.
- Keep a cash reserve of at least 3 months of operating expenses.
- Review your finances every week.
Most entrepreneurs skip that last bullet point. They forget to schedule time in their calendars. Life happens. They go a month without reviewing their financial situation.
Don’t be that entrepreneur.
Schedule an hour every week to review your finances. Look at what money came in. Look at where you spent money. Identify any gaps immediately.
Tracking Money Like A Smart Entrepreneur
Do you track your finances with a spreadsheet and sticky notes?
Throw that method away. It’s not scaling.
Successful entrepreneurs automate their finances:
- Connect their bank accounts to bookkeeping software.
- Schedule recurring invoices so they go out automatically.
- Set up payment reminders to automatically mail themselves.
Why does this matter?
Well, research from PYMNTS found that nearly 70% of SMBs nationally hold less than four months’ worth of cash reserves. That’s not a lot of wiggle room if something happens.
Say your best client is late with payment.
You’ve got bills to pay and no money is coming in. Or an unexpected expense pops up. Maybe it just happens to be a slow month.
What do you do?
You tighten up your invoicing process. Good invoicing apps for small businesses help you:
- Send professional invoices in minutes.
- Allow clients to pay you with multiple payment methods.
- See who has paid, who hasn’t, and who is overdue at a glance.
- Automate payment reminders.
- Create financial reports in seconds.
Everything is automated. You don’t need to remind your clients to pay you manually.
Final Tips: Automate Your Financial Systems
If you had to choose the best financial habit what would it be?
For most entrepreneurs, it’s going to be automation.
Sure, willpower drives you to do the hard things in life. But automations are like robots that follow your orders whether you feel like it or not.
Entrepreneurs who win with their finances start building systems as soon as possible and stick to them.
Here are a few ideas:
- Automate invoicing for any clients you bill monthly or annually.
- Schedule bills so you never incur late fees.
- Schedule a recurring block on your calendar to review finances.
- Create separate bank accounts for taxes, operations, and savings.
- Capture digital copies of receipts for every expense.
Building your financial infrastructure takes time. It might take you an hour or two to get everything set up. But man, is it worth it. You’ll make fewer mistakes. You’ll have less financial stress. You’ll have a better handle on what’s going on with your money.
That’s what successful entrepreneurs have.
Good systems take the thinking out of growing your finances. You create the system to automatically handle things the way you want them. Then you leave it alone and go grow your business.
Avoiding The Biggest Financial Mistakes
Alright, let’s focus on what not to do.
Entrepreneurs often make the same financial mistakes over and over again. Learn from them and avoid them altogether.
Financial mistake #1: Mixing personal and business finances
Did you open a business bank account when you first started? Stop mixing personal and business money. Do yourself a favour and open a business account today.
Financial mistake #2: Neglecting accounts receivable
Send an invoice and then forget about it. Big cash flow mistake. Keep track of who owes you money and when the invoice is due every day.
Financial mistake #3: Not budgeting for taxes
Don’t wait until April 15 to find out how much you owe in taxes. Set aside the proper percentage of every payment you receive.
Financial mistake #4: Overcomplicating your systems
You won’t use financial tracking systems that are difficult to maintain. Keep your financial systems simple and they will get done.
Making It All Work For You
Successful entrepreneurship isn’t a one-time decision.
It’s hundreds of little decisions you make every day that compound over time. Deciding to send that invoice today instead of procrastinating. Taking 5 minutes to review your financial situation this week.
Successful entrepreneurs know this and…
Check their cash position daily.
Send invoices within 24 hours of delivering a product or service.
Follow up on overdue payments. Immediately.
Have the reserves to cover at least 90 days of expenses.
Automate every single financial process they can.
It’s simple. But simple isn’t easy.
Few people will stick to the little things that become habit. But when you do… watch your business finance dreams come true.
Wrapping Up
You are not a successful entrepreneur if you hate managing your money.
Implementing good financial habits will relieve so much stress. Stop worrying about if you have enough to pay payroll. Dream about expanding your business.
Successful entrepreneurs have great financial habits. Building those habits will set you up for financial success with your business.
