Five Tips to Make Better Financial Decisions
Business owners generally need to purchase assets or inventory or make other purchases to help their businesses grow. But resources are often scarce, so it is important, therefore, to ensure you’re making the best financial decisions you can.
If you manage resources appropriately, you will be able to better accomplish your goals and improve your company’s overall performance.
Here are five tips to make better financial decisions.
- Pause:
Before making a purchase for your business, the first thing you should do is pause and think about what your goals are for your business. Will the item you are purchasing support those goals or deter from them? Don't pressure yourself or let other people pressure you. - Ask:
Ask questions about the costs and risks associated with a purchase. Keep asking more questions until you understand what you're paying for and what you are receiving. Don’t be shy about asking many questions. Here are some ideas: What will happen if it doesn't work out? Can I stop the transaction and get my money back? Are there fees, taxes, penalties, or other charges? What exactly am I receiving in return for the amount I am paying? What warranty or guarantee does this come with? - Compare:
Compare prices to make sure you are paying a fair price. Keep an eye out for anything that seems too good to be true. Ensure that the people and businesses with whom you are working are properly registered. - Estimate:
Estimate the costs associated with your purchase and make sure you are getting value for your money.You can find online tools and calculators to compare financial products or services. Compare the total cost, including fees and chargers, to the value you are receiving. - Decide:
If you thought about how a purchase will contribute toward your goals, asked all your questions, compared prices, and estimated your total costs, make a decision whether to move forward with the transaction or not. Write down all of the above and look at it objectively to help you decide.
We hope that by applying this method, you will be able to make better financial decisions to support your business.