Ask the Entrepreneurs: Financial Resolutions for Aspiring Entrepreneurs in 2022
As we enter a new year, it’s the perfect time to set financial goals and make resolutions toward a healthier financial future. This is particularly important for aspiring entrepreneurs who are looking to start their own business or grow an existing one in the coming year. To help you get started, we’ve gathered a list of financial resolutions from members of the Young Entrepreneur Council (YEC) that every aspiring entrepreneur should make for themselves in 2022.
1. Track Your Monthly Income and Expenses
According to Nathalie Lussier, founder of The Website Checkup Tool, regular bookkeeping is crucial for any startup or aspiring entrepreneur. Tracking your monthly income and expenses is the first step to understanding your business’ financial health. It also helps you make informed decisions on where to allocate resources and how to improve profitability.
2. Increase Your Rate of Savings
Money is one of the top reasons why people don’t pursue their entrepreneurial dreams. However, financial planning expert Lawrence Watkins suggests that you don’t have to be living paycheck to paycheck to become an entrepreneur. By increasing your rate of savings, you can build your financial cushion and have the freedom to take risks and invest in your business.
3. Can You Really Live on Ramen?
Before you quit your day job, Erik Severinghaus, CEO of SimpleRelevance, suggests testing your ability to live on a tight budget. This allows you to see if you’ll be happy living on a lower income. Try living on a budget for two months to see if you’re comfortable on the basics, such as ramen noodles, as it helps to keep your expenses lower while you are working on your project or your dream.
4. Take an Accounting Class
Understanding the basics of accounting is valuable for any entrepreneur. Thursday Bram, founder of Hyper Modern Consulting, suggests taking an accounting class, even if you never have to do any accounting work at any company you ever start. Being familiar with accounting reports may help entrepreneurs detect financial issues before they escalate.
5. Create a Personal Budget
According to Derek Flanzraich, founder of Greatist, entrepreneurs often forget to budget for themselves amidst the startup chaos. It’s common to overspend during stressful times, so taking time to create a personal budget is crucial. This allows you to understand your expenses and income, and it helps you develop healthy financial habits.
6. Join the Peer Economy
Participating in the peer economy is a way to earn and save money. Eric Koester, founder of Zaarly, suggests renting your couch out, finding a developer or selling your services on a freelancing site, or using platforms such as Airbnb or Getaround. These services can help you earn money, save money, and network with others in your industry.
7. Give Yourself Permission to Fail
Failing is part of life, and it’s part of entrepreneurship. According to Dave Ursillo, founder of The Literati Writers, giving yourself permission to fail financially or otherwise sets you up to try in the first place. The fear of failure is a common obstacle for aspiring entrepreneurs, but this resolution encourages you to take risks and trust your instincts.
8. Pay Down Debt
Elizabeth Saunders, founder of Real Life E®, advises aspiring entrepreneurs to reduce or eliminate personal debt before starting a business. Having lower recurring expenses gives you the freedom to take risks and invest in your business. It also makes it easier to secure funding from investors or loans.
9. Real-Time Visibility
Robert J. Moore, founder of RJMetrics, recommends establishing a system to access financial data in real-time. This allows entrepreneurs to stay on top of their business’ growth and progress, and it helps them address potential problems early on.
10. Launch Your Company
Aron Schoenfeld, founder of Do It In Person LLC, advises entrepreneurs to draw a line and launch their minimum viable product (MVP). Sitting on an idea doesn’t help you make money or validate your product with customers. Building your idea into a product or business will help you test the marketplace and validate your assumptions.
11. Find Great Clients
John Hall, founder of Digital Talent Agents, suggests that entrepreneurs target their profit by working with the right clients, not just more clients. Having great clients impacts the overall happiness of a company and improves profit margins.
12. Keep More of the Money You Make
Finally, Brian Moran, founder of Get 10,000 Fans, advises entrepreneurs to focus on keeping more of the money they make. This means controlling costs, making customers happier, and stimulating repeat purchases. A business is only as strong as the money it keeps at the end of the year.
In conclusion, these financial resolutions are essential for aspiring entrepreneurs who are looking to build successful businesses in 2022. Tracking your expenses, increasing your savings, testing a lower budget, and understanding accounting basics are just some examples of what you can do to achieve financial success. Remember that launching your company, finding great clients, and focusing on profitable growth are some of the pillars of success. The next step is to take action and commit to your resolutions. Happy 2022!
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