3 Critical Business Situations And How To Avoid Them As A Business Owner
Construction business situation
The first situation is that of a construction business. In this type of business, it may not be easy for you as a business owner to verify all your receivables, since a lot of the deposits happen in straight cash.
Again, businesses like construction companies may have a good month and then there could be nothing the next month. This means that you may not have recurring revenue that goes into your business.
As a business owner, to avoid this kind of situation, you need to keep track of your business revenue. You can achieve this by receiving checks and keeping a record as proof of receivable. For example, you can use a picture of a cheque or an invoice from your customer as a handy record to know the sources of your business revenue, especially in a construction business.
The second situation is a business owner who was trying to scrimp on the approval, we all know those people that are always trying to save money and get the best possible deal.
In this business, owners are always more concerned about the amount they would pay as a contract fee immediately after they get an offer or contract. This will lead to financial negotiations that can be risky for your business, like losing several contracts.
To avoid such kind of contract business situation, as a business owner you have to remain easy to work with in terms of the business negotiations. You need to understand every customer because business financing negotiations are based on the risks to be incurred.
Transfering money between bank accounts
In this business situation, business owners take funds and there can be a lot of transfers from one account to another. And sometimes, underwriting may want to see the transfer account just to make sure that no other fundings are pulling from your account.
Assured that everything's good and that the business owner is not behind on any payments, the underwriting would also want to see what's going on in the other account. Any more revenue found in the other account can be used by the underwriting to generate more capital.
You can avoid this situation by making sure, as a business owner, that you tell whoever handles the business financing of your multiple accounts. You have to notify your funding provider whenever you're doing transfers in and between your financial business accounts.
The above outlined are some of the critical business situations that can pose a huge amount of risk to your business. Whether you are in the construction industry, or going about financial business, as a business owner you need to avoid such situations so as to achieve your maximum business goal.