Hey there! 

It’s Money again! 

Ever wonder why small businesses fail within their first five years? Well, for the most part, the reason is not far-fetched; we’ve all been guilty of the financial mistake called: Splurging. 

Picture this! 

You’re scrolling through Instagram, and suddenly, you spot a stunning outfit. It makes you check your bank balance and think about using some money from your business. That outfit everyone’s talking about, all the famous people are wearing it. But here’s the thing: buying it wouldn’t help your business at all 

Research shows a staggering 80% of small businesses fail due to poor cash management, often linked to decisions like this. 

So, how can you stay afloat in our ever-changing economy? 

  • Separate Your Money: Your business exists to generate profit, not fund your wardrobe. Mixing personal and business finances is a recipe for disaster. Treat your business like a separate entity with its own dedicated accounts. 
  • Slash the Unnecessary: Take a critical look at your business expenses. Are there subscriptions you can cancel? Can you negotiate better deals with vendors? Every penny saved is a penny reinvested in your business’s future. 
  • Invest Your Profits: The Nigerian economy is ever-changing. A recent example is the February 2024 inflation rate of 31.7%. These factors affect business processes, which could affect sales. Investing your profits in short-term instruments like money market funds helps generate passive income and protects your hard-earned cash from inflation’s bite. 
  • Structure is Your Friend: A well-organized business makes it harder for company funds to become a free-for-all. Implement financial controls and clear spending procedures. 
  • Prepare for the Storms: Investing is great, but don’t forget about saving! Set aside a portion of your profits for specific business goals, like equipment upgrades or marketing campaigns. This “rainy day fund” ensures you’re never caught short. 

Ready to keep your business thriving? Watch episode 6 of our Money Series, “The Splurge Queen,” and learn more about building strong financial habits for your business. 

Download the Zedcrest Wealth app today! Let’s help your business become a success story, not a statistic.