Starting your own business is a good way to achieve financial independence, especially when you have big plans ahead. If it’s your first time to explore this possibility, consider franchising. It requires less work than having to start a business from scratch and it has a greater of success for a neophyte. Franchising is when you pay a sum to operate an existing business. You will be using a proven formula that has worked for all franchisees, that’s why the risks are less, compared to starting your own business where you may have to do trial-and-error with the market. With franchising, as long as you choose a strategic location and provide sufficient funding, the business is almost a sure success.
However, whether you go for franchising or starting your own business, you still have to practice very sensible habits in order to run your business successfully. One cardinal rule on which all business models are based is, keep track of all your expenses. Make sure you know where every single centavo goes because it will have an impact on your finances. Keeping track of your expenses will entail keeping receipts, so have the patience to do this consistently. You’ll feel and be more in control if you know where you’re spending your money on. Apart from that, you’ll have an easier time working with your accountant when it’s time to work on your tax documents.
The other cardinal rule when running a business is, open a savings account. This is where all your earnings must go and all withdrawals should only be for purposes directly related to your business. You must allow your earnings to grow while taking your expenses from another source. If you have no other means of income, it is essential that you have a set amount to withdraw each month for your personal expenses, but it must only be taken from the net cash flow – that is, the total amount after all operational expenses have been deducted from the gross income for a particular month. When you do this, you will be able to see and experience how much your capital has grown.
It is important to do business with a clear set of guidelines in your mind so you have a clearer path to success. Without these guidelines, the tendency is for you to just take each business day as it comes and eventually to spend the money that you may have still used as added capital. When this happens, you limit your business’ growth and success and this will not be a very good prospect for you, whether you have gone into franchising or running your own business on your own.