In every business, money management is very important to the success of its activities. The same thing applies to your pharmacy business. Your understanding of money management is key to your success. We shall discuss different aspects of money management and get us to understand how to ensure that we are doing very well in this area.

In this article we are looking at five mistakes that business owners make as regards money management. Knowing these mistakes will help you to avoid them thereby mitigating against the consequences.

  1. Not keeping proper records: A business that does not keep records is putting itself at a disadvantage. Without records it will be difficult to monitor and measure the progress of the business. When you do not keep proper records you are hampering the success of your business.  Some business owners keep records but these are either inadequate or irregular. There is wise saying that says “Whatever is worth doing is worth doing well”. You must keep proper records in your business. To know which records to keep and how to go about them, you should consult your accountant for professional advice.
  2. Not paying your bills as and at when due: As you run your business you will incur some expenses. Sometimes these expenses are on credit to be paid later. A good business owner must honour his payment schedules. If you refuse to pay your creditors as and when due will affect doing business with such people. When your staff is not paid on time his morale will be low and so will his output. Plan your payment schedule so that you can avoid defaulting in your payments.
  3. Mismanaging your credit facilities: At one time or the other your business will access credit facilities. This is necessary to properly capitalize your business in order to run it daily activities or improve them. Many business owners mismanage this money once they have access to them. They use the money for a purpose different from what it was originally meant for. This is a mistake that you must avoid in your pharmacy business. You must use your credit facilities properly and judiciously.
  4. Not checking your profitability regularly: Many business owners only check the profitability of their businesses at the end of the business year.  The risk with this practice is that by the time you will get this feedback it may be late to make changes. To avoid this risk, you should carry out profitability check on your business very often. By so doing you will understand what is working or not working, and this will avail you an opportunity to make necessary changes or decisions.
  5. Not setting a specific wage for yourself: When you run a business, you are actually working in the business too. As passionate business owners we are likely to decide not to pay ourselves any wages but in my opinion it is good practice to put ourselves on some wages. This will prevent us from taking money out of our business for our personal expenses. Many business owners make the mistake of spending their business money on personal and frivolous expenses. You must avoid this in order to prevent running your business aground.

These mistakes are common to many business owners. Now that you have known them I believe you will take precaution to avoid making these mistakes. However, this list is not exhaustive.

Do you know any other mistakes business owners make that could affect their money management? Pls, share in the comment

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