Managing money properly is one of the most important skills for any entrepreneur. Many small businesses fail not because of poor sales, but because of poor money management. This guide explains simple and practical ways to manage business money correctly.

 

Step 1: Separate Business Money from Personal Money

Never mix business money with personal money.

  • Do not use business cash for family expenses
  • Do not use personal money without recording
  • Mixing money creates confusion and loss

What to do:

  • Keep separate cash box or wallet
  • Open a separate bank account if possible
  • Pay yourself a fixed amount monthly

 

Step 2: Keep Record of All Income and Expenses

Record keeping helps you understand your business.

  • Daily sales amount
  • Daily expenses (rent, electricity, transport, raw materials)
  • Loan or advance payments

What to do:

  • Use a notebook, Excel, or mobile app
  • Write records every day
  • Check records weekly and monthly

 

Step 3: Understand Profit and Loss

Many entrepreneurs do not calculate profit correctly.

  • Sales ≠ Profit
  • Profit = Sales – All Costs

What to do:

  • Calculate total monthly expenses
  • Compare with total sales
  • Check if business is making profit or loss

 

Step 4: Control Business Expenses

Unnecessary expenses reduce profit.

  • Buying unnecessary items
  • High mobile or electricity cost
  • Extra staff or wastage

What to do:

  • Spend only when necessary
  • Compare prices before buying
  • Reduce waste and extra costs

 

Step 5: Manage Cash Flow Carefully

Cash flow means money coming in and going out.

  • Cash shortage can stop business
  • Late customer payment causes problems

What to do:

  • Keep some emergency cash
  • Ask customers for advance payment if possible
  • Follow up on due payments

 

Step 6: Set Proper Product or Service Price

Wrong pricing can destroy business.

  • Price too low = loss
  • Price too high = fewer customers

What to do:

  • Calculate product cost properly
  • Add reasonable profit
  • Check competitor prices

 

Step 7: Save Money for Business Growth

Saving helps business expansion.

  • Buying new equipment
  • Increasing stock
  • Handling emergencies

What to do:

  • Save a portion of monthly profit
  • Keep savings in bank or secure place
  • Use savings only for business needs

 

Step 8: Use Loans Carefully

Loans can help or harm business.

  • High interest loans increase pressure
  • Loan without planning causes loss

What to do:

  • Take loan only if necessary
  • Check interest rate and repayment plan
  • Use loan strictly for business

 

Step 9: Pay Taxes and Fees on Time

Legal compliance protects your business.

  • Trade license renewal
  • Tax payment (if applicable)
  • VAT or BIN for some businesses

What to do:

  • Keep track of renewal dates
  • Ask accountant or SME help desk
  • Keep payment receipts safely

 

Step 10: Review Business Money Regularly

Regular review improves decision-making.

  • Monthly profit review
  • Expense analysis
  • Future planning

What to do:

  • Review accounts monthly
  • Identify problems early
  • Adjust business strategy

 

Final Tips for Entrepreneurs

  • Always know where your money goes
  • Spend less than you earn
  • Keep simple but clear records
  • Plan before spending
  • Take advice from SME Foundation or experts

Good money management keeps your business safe, stable, and growing.