An entrepreneur is a person who takes up the necessary risks and starts a business. An entrepreneur is a risk taker and a daring person. The top 100 billionaires in the world are entrepreneurs. This is people who take risks and started it low, managed their business and realized billions of profits. In the world today many people have started starting their business. In the universities and colleges, curriculum developer has started incorporating management skills in each university and college degree. The government on its sides is welcoming the entrepreneur spirit by giving incentives and favorable working conditions. What are the do’s and the don’ts of being an entrepreneur?
Have a saving plan
Saving is the amount of money that does not go to spending. Economists say saving is the amount of profit in excess of the disposable income. Disposable income is the amount of money that a normal consumer is ready to spend a month. In a business, the real progress of the business will be measured in how many assets versus liabilities have the business accumulated. A successive entrepreneur does not mix business money and personal money. The only place when the two should meet is in a saving account. A saving account can help one acquire a loan easy from the bank.
Keep business records can book of accounting
A successive entrepreneur will keep track of the business. He will draw charts and graphs to analyze how the business is doing. This can only be done by keeping good business records. All the invoices should be recorded in a journal entry. In addition to that, an entrepreneur should run a software that will enable good bookkeeping. The books of accounting for an entrepreneur should be kept secret as he is a property of the owner. Period comparison with other businesses is very advisable.
Don’t keep your gearing rations high
Gearing ratio is the ratio of assets to debts. A business with a high gearing ratio is one that has more debts capital than equity capital. This means that the amount of money that the owner has invested in the business is less than that amount he has borrowed from other outside sources. A low gearing ratio is good and advocated by many financial analysts. It is a way of avoiding tax. This is because interest in paying a job is exempted from taxes. However, a high gearing ratio dilutes the ownership of the business. An entrepreneur should maintain a gearing ratio of about 30%.
Don’t make quick decisions
As an entrepreneur, there are times that one needs to make decisions that can shape the life and profitability. A slight mistake in the decision can cast the whole business into a dark end. Never as an entrepreneur make a hasty decision. Always sit down compose yourself and understand the legal, operational and ethical framework that each business should take. If you are new to a sector be sure to consult an expert in the field. Before implementing a policy fast run a drill version of the policy.