4 Money Mistakes Every Business Owner Makes

Being your own boss can be exhilarating, until the moment you realize it can all go horribly wrong at a moment’s notice.  Maybe this is because you haven’t managed your money, or maybe it is because you haven’t protected your family in the case that something happens to you.  Either way, money mistakes can come back to cause significant sorrow for business owners – especially if they are ignored.

Why does this happen?  For many business owners, they are too caught up with just trying to keep the lights on to even think about long-term planning.  For others, it is a false sense that things will always stay the same.  The reality is the downturns and accidents happen and if you haven’t prepared yourself and your family then you are doing both a disservice.

With that in mind, here are four money mistakes every business owner makes.

Mistake 1: No Insurance

While this might seem like an added expense, the reality is that when managed correctly, insurance is an excellent way to manage risks.  The key is to manage the cost of your premiums with the coverage you are getting.  Doing so help you maximize your coverage levels while minimizing how susceptible you and your business are risks.

Policies you should consider for your business include general liability insurance and ‘key man’ insurance.  The latter will cover the company and maybe your family in case of anything were to happen to you.  This is important as most small businesses rely so onheavily on the owner that it would be almost impossible to continue operating if something happened to them.

Another way this can help is that it will provide added security for your family as the insurance payout can help to cover some of the uncertainties that will pop up if you are no longer in the picture.  Not to be morose but this is something that all small business owners should think of, but few rarely do.

Mistake 2: No Budget

Let’s face it, money can go out the door much faster than it comes in the door.  Even when times are good it can feel like you are bleeding cash and for this reason, you need to set up a budget to help manage your business.

It doesn’t matter if your revenue and expenses are ‘predictable’ or not, the key is to start tracking your revenue sources and your expenses and then see how the two are related.  Not only will this help you to better manage your costs, it will help you to identify the relationship between your revenues and the expenses required to deliver to your customers.

Another benefit of having a budget in place is that it can help to improve how you do your pricing.  Gone are the days of picking a number out of thin air as you replace your pricing with data.

Mistake 3: Not Preparing for Emergencies

Just as with your personal finances, you need to prepare your business for emergencies as well.  This could be a sharp change in the economy or in your local market, a personal injury claim, or even a motorcycle accident while you are enjoying some free time.  In the case of the latter, you might want to reach out to a lawyer who specializes in such claims, such as https://westcoasttriallawyers.com/practices/motorcycle-accidents/.

But even if a lawyer helps you, the question should be whether you have helped your business?  The answer to this starts by being prepared for emergencies.  As mentioned, having insurance can help but it is not the only answer.

What can you do?  It starts by making sure your business is on the firm financial footing and then setting aside some of your profits for a rainy day.  Beyond this, you also want to establish a relationship with your bank as the reality is that it is very hard to get credit when you need it, so you are better off getting it in place when times are good.

Mistake 4: Failing to Reinvest

There was a time when the steel industry in the U.S. ruled the world. However, boards of these major corporations failed to reinvest at a time when their foreign competitors had no choice but to build new mills.  Fast forward 50 years and the domestic steel industry is a shadow of what it once was.

The lesson here is that you either reinvest in your business or you die.  Sure, you might not be running a steel mill worth hundreds of millions of dollars, but this is something you should take to heart for your business.

This is not to say that you need to keep pouring money into your company without a return.  Instead, invest in those priorities which will help your company grow.  Doing so will help to make sure your business is on a strong footing for the future.

 

Why Do You Need to Change Strategies – Forex Market

Trading experts usually look for a better edge and a better strategy to trade the market. They consider trading strategy as the main key to success. Why do you think they consider it? Basically, strategy provides a framework for successful trading. If the trader has a proper strategy he will be able to decide the money management techniques, entries, and analysis accordingly. The strategies are profitable only when the trader stays consistent with the rules. This is why traders must pick the right strategy and remain consistent with it. Anyway, if you commit to a less productive strategy you wouldn’t be able to reach your potential. Most of the time, changing and updating the strategy will offer better results. If you don’t see any changes you may have to change the strategy completely. So, when you should change the strategy?

Learn from your mistake

No one in this world is perfect. As a currency trader, you will always have to face losing trades. But this doesn’t mean you will become frustrated after losing a few trades. You need to focus on the long-term market trend and trade the market discipline. Try to maintain a trading journal so that you can learn from your mistakes. When it comes to spread betting profession, a small mistake can cause significant loss. So never risk more than 1% of your account balance even though you have the perfect the perfect trade setup. Managing your losing trades is the most difficult task in currency trading profession. Once you learn the proper way to manage your losing trades, you will never have to worry about your financial freedom.

If trading style and risk management contradict

The risk management methods differ from one trader to another based on the trading style. Some traders prefer higher risks whereas some others are risk-averse traders. Similarly, trading strategies differ according to the timeframes and markets. The risk management method will differ according to the individual’s financial goals and risk levels. The trader’s ability to take risks will have the direct relationship with the risk management. There are different strategies and risk associated differs from one strategy to another.  But the problem is related to risk intensity and trader’s style of trading. For example, there can be a trading strategy that’s perfect for risk-averse traders, but this wouldn’t suit for a trader who loves to take the risk. You should change your strategy if your style and trading strategy contradicts. To remain in the Forex market, having the perfect understanding of Forex strategies is important.

If it is an obsolete strategy

The market of Forex is always changing, you cannot expect the market to be in the place you want it to be. The trends can change or reveres, whatever happens, a successful trader will manage to stay in the market.  So in such instance, the strategies based on the market conditions can be treated as an obsolete strategy. So being a naïve trader you should identify the strategies that are unprofitable and don’t match the current market situation. But it can be pretty hard if you do not know the ways to find it. So in such case, you can check whether it is performing or not. If you can change a few things of strategy, you should do it but the impact on the profits can be high. If you don’t want to damage your profits make sure to study the historical data and other factors that support the strategy.

If it is a confusing strategy

If you pick a strategy that you don’t feel comfortable it may affect your trading journey heavily. You may have to deal with a lot of confusing. How can you manage trading if the trading strategy is itself confusing?  So if you don’t understand don’t think twice to change the strategy that you are currently using.

Forex Strategy Dilemma The Scalping Strategy – Online Trading Account

Most people try to get rich in a short time and they use any plans possible. If you are not new in this industry, you should know the name of scaling strategy. It is a strategy where traders keep their trades open for few seconds and with high position size. When trader scalp, they expose their account to high risks and if the trades go wrong, you can lose all your investment. This does not stop people from investing in scalping and it is increasing every day. There is a debate between the traders if they should scalp or they should avoid this strategy. This article will try to answer your question by telling you both the pros and cons of scalping. It is no doubt that it is an attractive plan where you can make a profit in a short time but you also have to keep in mind the possible risks. If trades go wrong or you fail, there is no way you can overcome your loss. This article will try to explain these things and clear the dilemma of scalping strategy.

Those who are professional in the retail trading industry never take unnecessary risk. They always focus on the conservative trading style and the trade market with the extreme level of discipline. Some of you might be following other people trading system but this is not the perfect way of trading. You have to understand the risk factors and develop a simple trading system. Try to learn the art of price action trading system since it will help you to execute quality trades.

You should do it if you are confident, have enough skills and knowledge

Confidence is the key to success. If you are confident that you can pull off amazing profit in such a short timeframe, you can start scalping. However, the risks should also be your concern. People who scalp have vast knowledge about the market trends. They also have a rich history of their past trades and they have got the skills required for scalping. As you trade in seconds, you need to be very precise in trading and close when you have made your profit. With perfectionist skills and rich knowledge, you can make money with scalping if you have the confidence. This is how you can make money without waiting like the other traders. Be very smart when you trade with your real online trading account. And always try to be safe when it comes to investment business.

Having said all of that, there are also some disadvantages to scalping. Everything has a bad side and this strategy has more cons than pros. Read the next part of this article and you will find out if it is really worth the risks.

Dodgy, expose to high risks and need precise trading

The trends can be tricky at times. You may think the price is going upward and as you plan your trade and place the trade, the trend will go against you. As scalpers do not have the chance to keep their trades open like the positional traders or swing traders, you have to be very precise in your trading. A small mistake can cost your capital. Forex itself is a risky industry and scalping only add peril to it. Do not get overconfident in your capability. If you do not have any past history of consistent profit, do not go for scalping. It requires high precision and timely execution of trades. If you are late for even a moment, you can lose your money. You also need experience of trading in volatility as all scalpers have to place their trades in volatile trends. If you compare with risks to reward ratio, you may get an answer that it exposes your deposit to incredible risks. Not all people have that smart intuition to react blazingly fast and scalping is not for all.