Navigating Financial Challenges as an Entrepreneur

Starting your own business is a big decision to make, not to mention a financial challenge in itself. From funding your business to managing cash flow, there are several obstacles to navigate through as an entrepreneur. Here are some tips to help overcome these challenges:

1. Funding the Business
There are a few different ways to fund a business and with a little bit of research and creativity, an entrepreneur can find the right that fits their needs. Depending on your income and credit score, getting a loan from a bank is the number one way to fund your business. Another option could be to connect with investors and venture capitalists to get assistance funding your business. Government grants such as the Small Business Administration (SBA) are known to have a number of programs that can provide financing for businesses.

2. Managing Cash Flow
Cash flow is what keeps the lights on in the business so it’s important to have a good way to manage how revenue is coming in. It’s a good idea to be aware of the factors that can contribute to cash flow problems – fluctuations in income, unexpected expenses, and slow-paying customers – and to know how to bridge the gap while you are short on funds to keep your business running. Maintaining a strong cash flow and keeping financing options always ready will help will cash flow shortages.

3. Pricing Your Products or Services
One of the most difficult aspects of running a successful business is pricing your products or services correctly. Of course, you want to make a profit but you can also risk losing customers to your competitors if your products and/or services are priced too high. On the other hand, pricing too low can mean that you are not making enough revenue to keep your business up and running. Knowing the balance between making a profit and not losing customers by pricing too high is something that may require a little bit of trial and error as an entrepreneur.

4. Dealing with Debt
When starting your own business, it’s easy to get in over your head financially. Going into debt is something that entrepreneurs may not be able to avoid. The important part is knowing how to deal with debt and coming up with a plan so it does not spiral out of control and become a major financial burden. You can take control of your debt by first taking a closer look at your expenses and seeing where you can cut back. It may also be a good idea to consolidate your debts into one monthly payment. This will make running your business easier as well as free up more cash flow that you can use to invest in growing your business.

5. Separate Business and Personal Finances
It’s never a good idea to mix your business finances and personal finances as it makes it difficult to track cash flow and distinguish taxes during the tax season. Combining business and personal finances in one bank account is considered a red flag with auditors, should your business be audited for any reason. Separate bank accounts for your business will make tracking finances easier and will allow you to pay yourself a set salary amount instead of just paying yourself an “off-the-cuff” amount based on profits.


Having experienced accountants on your side can help navigate your business plan as an entrepreneur. JTS Associates CPAs are here to help. Contact us at (516) 877-5900.


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