There is nothing more negative in the company than seeing how the financial situation of the same is complicated. Sometimes, either because of pressure or inexperience, mistakes are made when starting a business that should be avoided at all costs.
It is crucial to try to avoid these
financial errors in SMEs,
since the first stage of the organization is key to establishing a good patrimonial situation.
What mistakes do small and medium-sized enterprises make? What are the most common mistakes that entrepreneurs make? Below are all of them detailed.
The most common and dangerous financial mistakes in SMEs for the growth of your business
Thanks to knowing what are the most committed mistakes, a company will be able to solve them as soon as possible and minimize their effects. Notes!
A higher initial expense, the big mistake of entrepreneurs
Starting and starting a business is not easy. In the first days or weeks of the company’s life, a series of logical and necessary investments must be made to make everything work. But not everything is valid.
At first, the organization may have Treasury problems, since the activity is not mature and strong.
Therefore, being clear about the costs at the beginning of the activity is essential, so it is possible not to fall into unnecessary or luxurious expenses.
For example, buying expensive furniture, luxury cars or self-vending machines in the office are not good ideas at first. Always evaluating all costs is the best option.
Entrepreneurs with very high salaries
In an SME, especially when starting, salaries must be commensurate with the income generated.
Starting with a very high floor, even when the company does not have that income by any means, can put the viability of the company at risk.
Therefore, before hiring more staff or increasing remuneration, each entrepreneur must make an expense or efficiency plan to know if the company can assume these expenses.
Higher levels of profitability make businesses stronger.
Carelessness and lack of control in cash flow
A constant cash flow in the company is ideal. Many entrepreneurs make a serious mistake: not controlling the money that exists in the company or that generates it is something unforgivable that can lead the organization to have a ‘great drought’ of money.
In order not to be neglected, it is recommended to have a cash flow of two months of costs to have good margin of action in the event of any unforeseen event.
The decision to diversify the business instead of boosting investment
Some entrepreneurs go so far as to diversify profits after a successful start of their business, rather than reinvesting in the original business.
Before entering into new business or adventures, the company should ask why it does so and if the idea is correct.
Main problems of SMEs with the Public Administration
Problems with the tax return are common and in most cases are motivated by not knowing how taxes work.
Lack of tax control
Another of the financial mistakes of an SME is not keeping track of the taxes that must be paid.
For example, ignorance of the
to declare taxes such as quarterly VAT or Social Security contributions of employees paid late.
These types of problems, beyond creating a hole in the company, can damage its image, not to mention having possible administrative sanctions from the Tax Agency.
Therefore, the ideal is to pay taxes ‘day by day’ without delays, knowing what the taxes are intended for and in what term they must be paid.
Many companies choose
to hire a tax advisor,
who helps them file taxes, avoiding oversights and future penalties.
Do not declare capital gains in personal income tax
Entrepreneurs should know that there is an obligation to declare any capital gain in the Personal Income Tax.
All taxpayers are obliged
to make these declarations, especially if they exceed € 1 500 of increase in the patrimonial value within the organization.
Failure to do so may pose problems with the Administration with the arrival of sanctions or with the granting of different public aids.
Financial errors in SMEs,
in many cases, generate significant problems for companies.
Especially entrepreneurs make many of these mistakes when undertaking a business and it is important to avoid them at all costs if you want the company to be healthy and move forward.
Ignoring all these failures or errors and paying attention to these details, the business will be more profitable.