5 Cheap Money Mistakes That Kill Small Businesses

20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.

Businesses are treated as being separate from the owners and this is what we call, entity concept (i.e business related activities and owners related activities should be accounted for separately).

There’s a concept called ‘owners drawings’ in the accounting field which is one of the basic most important concepts needed for any business to grow and survive.

Profit acquired should be re-invested in the business until the business stands and grow eventually without relying on additional funds thrown into the business.

Business record keeping is the process of recording all the financial transactions and events that occur in your business. It could be purchases, sales, earnings, receipts or payments made.

Simply, profit is the difference between selling price and cost price but many small business owners forget to scrutinise the cost they incur before arriving at profit.

Owning a small business could be overwhelming and very exhausting due to the fact that you have to micro-manage almost every single task. However, managing your finances effectively is one of the key ways to sustain your startup. Be sure to avoid each of the 5 cheap money mistakes I've outlined and get ready for success.

Be sure to check us out for more ways on how to sustain your small business on http://trendsleek.com.