Good day!
I have a mentee who owns his own business which makes pretty good money. However, he blows his money as quickly as he earns it. In one of our conversations, I encouraged him to start keeping records of his income and expenses. I recommended the app I used and so he started. This was somewhere in December 2020. In mid-January he wrote to me: ‘I wish I knew where the money went. I think saaa. Between December and January over 10k spent. I didn’t do anything extraordinary too’ Does this statement resonate with you? Well, grab a chair as I share 4 money mistakes startups should avoid.
And by the way, these are 4 of my own top mistakes. Some of them cost me paaa. Thank God He’s redeemed me through some wise counselling and well, some bitter experiences too.
Having disorganised financial records
So here is the thing, I did write down almost every expense from our events and other activities. The only problem was, they were in different places and I never collated them. Therefore I could never tell for sure how much I had spent on a particular activity. My records were all over the place.
At some point, I started using MS Excel to keep my expenses and income. However, this sheet was on my laptop and so I realized many records were not kept. This too was ineffective and would cost me dearly when I started paying my taxes.
Not considering all costs before pricing
Oh boy! Where do I start on this one! I used to price things off the top of my head. For instance, one time I was organizing a Dinner With The Girls. As soon as the hotel agreed to give me the space and food for 70ghs, I immediately priced the ticket at 100ghs. My thinking was, I would make 30ghs per person. Haha this is quite embarrassing so let me laugh it off!
I didn’t consider video production, entertainment fee, volunteers, marketing and so many other things. In the end, I spent way more than I made and as usual used my personal money to sort the rest of the bills out. It would take me several of such experiences to finally learn. Actually, have I even learnt my lesson? Well, time will tell.
Not making a budget for the month
I used to just spend as I went. No planning, no budget. When my money got finished, that was it. This caused me to always underestimate how much money I actually needed each month. This also made it easy for me to make the next mistake…
Giving without any plan
First of all, I used to give to charity out of my revenue and not my profit. I would give thinking ‘oh this person really needs help’. However, the money was not even mine in the first place. It belonged to my business and I had a responsibility to steward it appropriately. Sad thing was, when I gave without planning and the business went broke, I would not be happy with God.
Secondly, I had no system for giving. Any person with a sad story got me. And oh, I was duped twice by someone I thought I knew who ‘needed help’. I would find out later that she had played the same trick on others.
I have certainly made other mistakes but won’t bore you with all for now. If you are reading this and are especially a startup then please think about these 4. Are you:
- Having disorganised financial records?
- Not considering all costs before pricing?
- Not making a budget for the month?
- Giving without any plan?
The first step is awareness that something is wrong. God willing next week, I will continue this conversation with some of the tactics that are currently working for me. I hope you will be back to read. Meanwhile, please share your own money mistakes and let me learn too. I bet you have a few.
Ama xx
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Photo Credit: Vera Obeng Photography
Woow. The money mistakes I make always.
This article came at the right time.
Welcome Philipina!
I enjoyed the article and its lessons. Thanks.
Frances, you’re welcome.
I am a culprit! I will be waiting for the next post. Thank you Ama.
Always a pleasure Samuella. I hope you can join me on our Facebook/Instagram page on Tuesday 2nd March, 2020 at 6pm GMT for Mind Your Business. I will be discussing this.
I also make same mistakes.
I hear you Deborah. If you are ready to correct, then please join me for the next episode of Mind Your Business on Tuseday at 6pm GMT on our Instagram or Facebook page.
Thanks Ama! I’ll be looking out for the next article. I also need financial advice paaa.😁
Sure Abigail. My pleasure
Oh my lady. This came in handy. God bless you. Always making these mistakes and then end up topping up from my salary from my day job😢. God bless you
Amen. Victoria, we will do better OK? Sending you hugs
The mistakes you make especially when you’re managing and handling everything about the business… It’s so real
Thank you Ama.
Always a pleasure Rahmat
Giving without without any plan! Hmmmmmm. That’s me!!! Thanks for sharing.😍
We are being redeemed!
Always a pleasure Sheila.
The misake is about budgeting ,oh mine. I can sometimes make budget and yet still not follow. Asem ohhh
Which app is helping please
I totally get you Naomi. I currently use Day to Day Expenses. I will share more about it in the next blog post.
You have read right through me Lady Ama, I can’t wait for the next article. Thank You so much.
Always a pleasure Lawrencia
Thank you Ama. I have made these mistakes over and over again.
Will wise up
Amen. All the best Doris
I make all the 4 mistakes. Without calculating I have invited two teen nieces neglected by parents to stay with me in my family.
Oh dear!
My greatest mistake and regret is Giving without plan.
It is a personal weakness I am seriously working on.
I am easily convinced with touching stories of friends who need helps only to find out later that is their way of life.
I have lost lifetime investment in this regard.
Shockingly, a respected student leader tricked me just last year and have still not recovered from the trick.
Thanks for sharing this Lady Ama.
Awww Bismark, I can imagine your pain! Lessons learnt, we keep moving.