As a business leader, you are probably quite concerned about things you could do to strengthen your own reputation and that of your company. The more visible you are in public, the more your words and actions matter. That reality applies to every aspect of your life but particularly how you manage your money. In today’s society, wealth and power go hand in hand. You can carefully conduct yourself so the money you have can be used for worthwhile things.
Avoid Mixing Business and Personal Finances
From the moment you start a business, it’s essential to have one bank account for your corporate life and another for your personal life. Then, go a step further and make personal and business budgets. Stick to them firmly, even if you’re tempted to do otherwise.
Your accountant will appreciate the diligence you showed in keeping things separated and it’ll make things much easier when it comes time to pay taxes. How could the separate accounts help you be a stronger leader? Your decision to create them should make it less likely you’ll get wrapped up in unnecessary confusion about taxes and the ways you spend your money. In general, having separate accounts leads to a greater amount of transparency.
Learn to Negotiate Effectively
Being a good negotiator could lead to better business deals that save you money. If you avoid negotiating and just take the first offer given to you, people will likely view you as someone who is a pushover. Furthermore, other individuals in the business world might start realizing you are someone they could take advantage of and act accordingly.
Learning to negotiate can be tricky, especially if you’re not used to focusing on your own aims. Negotiating doesn’t necessarily mean you’re being selfish, but it allows you to examine deals and make sure they’re not more costly than they should be.
Don’t Be Too Reliant on Your Credit Cards
Credit cards are certainly convenient but if you depend on them too much and other business leaders notice, they might wonder if you’re finding excessive enjoyment in the ability to pay later, resulting in irresponsible management of finances. For example, if the word on the street is that your business is going through a rough patch and the rumor is true, eyebrows will probably be raised if you take 10 business executives to an extremely expensive lunch and pay for the meal with your credit card.
Use your business credit card responsibly and only increase your debt if doing so raises revenue. Also, check your credit score regularly and make sure to pay off the credit card amounts as quickly as you can. When choosing a credit card that offers rewards, pick ones that make the most sense for your business. In other words, view your credit card as a supplemental tool that temporarily increases your spending but not something you depend on constantly.
Don’t Set Expectations You Can’t Uphold
During your time as a business leader, you might get opportunities to buy things and have a longer amount of time to pay the balance due than what people would normally get. If so, that means the relevant party has established that you have enough credit worthiness and overall integrity to be granted more time to pay.
If you agree to one of those arrangements, always make sure beforehand that you will definitely be able to pay what you owe within the specified time. In the event that you are not able to, you’ll probably have to pay late fees and may run the risk of the associated company or vendor never extending such an offer to you again.
Stay Involved in Aspects That Could Affect Your Business Finances
Once they reach certain points in their careers, some business leaders take hands-off approaches to certain duties within their companies. Although it’s understandable and expected that you cannot be involved in everything, think of things strategically and determine which things you could influence that may be beneficial for your business.
For example, Eugene Chrinian, the owner of Factory Direct Enterprises, LLC and the organizational leader of Ashley Furniture HomeStore, was heavily involved in establishing several Ashley Furniture HomeStore locations throughout New Jersey and metropolitan New York. Even after Chrinian had set up his first store and theoretically could have delegated more tasks to his employees, he stayed involved in as many aspects as possible, sometimes even sweeping the floors and interacting with customers.
Currently, he plays a central role in hiring the company’s executives, which directly helps his brand stay profitable. In the same way, you should evaluate the things you could do to maintain continual involvement while overseeing parts of your business that affect finances.
Hopefully, these tips and real-world examples help you understand how to best manage your money as a leader who gets noticed. Practicing them in your own situation could literally pay off.