Posts Taged investment-preservation

The Importance of Investment and Money Management for Funding Future Business Expansion

Have you ever planned for an expansion of your business in the future? If you are intending to go big with your business, it is vital that you understand the important role of Investment and Money Management for your business.

Basically, business expansion is what happens when your business hits the stage where too many opportunities come your way and you’re unable to take advantage of them all. That is why as future business tycoons, it is best for you to learn the basics of managing your business to achieve a healthy and productive business.

Whether you find yourself a business coach, engage the services of a business mentor or work with a business consultant, anyone of these people can help you understand the importance of investment and how you can effectively manage your money during the process of business expansion.

Money management is a skill that every individual must learn whether you are just an ordinary person or a business magnate. Basically money management is the art of learning how to preserve the money you have and wherever possible have it grow. Obviously being good at money management is very important for your personal funds as well as the funds of the business. Melbourne business coach, David Guest has set forth his guidelines on the important aspects of money management that you should know.

Learn to Manage Your Money

When engaging in business, you need to learn on how to manage your money. By doing so, you can help protect your business from money mismanagement (usually this shows up as ‘loosing money’).

Consider your business taking out a loan to finance your business costs during business expansion. By doing this, you are banking on your business increasing profits enough to repay the loan through earnings very, very quickly. Should things go wrong for whatever reason and you’re unable to make a loan payment, have you risked putting your business into insolvency?

Every decision you make about money matters is either growing your money or shrinking it. As your business coach will tell you, it’s important to back yourself as long as you’ve got the downside covered.

Know How To Handle Your Sources of Funds

Since you are expanding your business, it is a must that you know how to handle your sources of funds.

If your funds are coming from multiple sources, such as several banks and a venture capital group, then you need to have a very clear idea of how those different streams of money are being put to use.

Not all money is equal in this type of situation, as different sources of money are likely to have different expectations as to how you report on how it has been used as well as account for it differently in your records. It is of paramount importance that you know and can forecast the future of your business in every sense including cash flow, income, debt and profitability.

Investing and Risk

 

With business expansion comes the risk of a bad investment decision. Before investing your money, you need to think of the time, risk and the expected return for the investment that you are about to make. You must ensure that your rate of return on the investment is going to be more than your capital cost.

If a deal looks too good to be true, make sure you go over the numbers with a fine-tooth comb. Just because a business looks great on the outside doesn’t mean that their books aren’t a mess.

Expanding your business through business investment in another business is an excellent way to grow exponentially, as long as there’s no hidden debt or complex legal agreements that bind you to an unprofitable deal.

Investment Preservation

Preservation is just as important as increasing or growing the value of the money you’re making. It’s easy to get caught up in the thrill of chasing the next big take-over deal, buy-out or joint venture.

If you take your eye off the ball and allow it, others will help you spend your money, rapidly eroding all the great work you’re doing with your investment and money-making strategies.

Get into the habit of learning about money management so that you have the skills and knowledge required to protect your money too.

To get yourself ready for having these types of problems in your business consider working with a business coach who will assist you with laying the foundations needed in your business for sustained success and opportunities for growth. In Melbourne, David Guest has assisted many business owners in taking their company from seven figures into nine and ten figure businesses. 

So if your goal is business expansion, remember these guidelines to help you manage your business well now and give you the right foundations for achieving your company’s future goals and objectives for business expansion.
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