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Insights
many cases if you are reselling a product you should calculate the import fees, and any other business-related costs. By creating a budget, you’ll analyze how much you earn and spend, and that will help you to make better decisions about where to spend and save.
Money Smart
Insights on financial literacy for young entrepreneurs (from another young entrepreneur) b y A L D H A B I A L M H E I R I
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oung entrepreneurs need to understand the basics of financial literacy in order to run their businesses successfully. Managing money and cash flow is mandatory to ensure that your business can expand and grow. The following points can guide you to better understand the key concepts of budgeting, saving and cash flow management, and make smart financial decisions for your business. BUDGETING A budget is just like fuel for your business. It helps you better understand how much money you are spending and earning in order to generate revenue. Creating a budget should involve listing your income (the money you earn from your business) and your expenses (the money you spend on things like raw materials or products, marketing, and shipping). For example, if you’re selling a book, your income would be the total sales you make. Your expenses would include the cost of publishing and making that book a real product, in so
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PREPARE FOR THE UNEXPECTED It’s always better to save a part of your income. It’s always life saving when it comes to unexpected issues in business- perhaps we need more raw materials, fix equipment, or cover unexpected low sales. You can start by putting a small portion of your income, even if it’s 5% into a savings account. Over time, these amounts will give you a safety net for any unexpected challenge in the future. When you secure your savings, this allows you to keep running your business smoothly, even when challenges are in your way or when your business doesn’t go as planned. MANAGING CASH FLOW: KEEPING YOUR BUSINESS RUNNING A lot of young people in business struggle when it comes to their cash flow. It is therefore important to understand what the cash flow cycle is in order to manage the business and understand how much you are investing and how much you are earning. Cashflow means the amount of money that comes in your business as an income and out as investment or expense. A positive cash flow refers to