#5 Money Management Tips for Small businesses Although you are taking out a small business loan, your personal credit record is a reflection of how you will run your business.

When it comes to money management, are you wasting money or using your resources wisely? To help you make smart spending decisions, here are some advices to help you stop wasting money.

Careful With Finances - Gowri Mukherjee, CMO and Co-founder, CreditMantri

Many small business owners are careless in their personal finances and end up paying a heavy price in terms of interest charges when they take a business loan. Often business owners are unaware that their personal credit rating could be a factor when banks review their application for a business loan. Although you are taking out a small business loan, your personal credit record is a reflection of how you will run your business.

Lenders will look at your credit score and credit report and would like to see demonstrated repayment discipline in your personal finances as well. A poor personal credit record might result in high interest rates and expensive repayment terms on your business loan.

Spend Less On Capex - Tina Garg, Founder & CEO, Pink Lemonade

Most BIZ Experiencess today spend heavily on Capex; investing in things such as fancy offices at the time of
starting out and that is a big no-no. For example, instead of looking for a space in the heart of the city, rent spaces in slightly peripheral areas of the city.

Secondly, instead of spending heavily on office furniture and interiors, use something that more plug-n-play -- free desks and chairs, and lighter pieces that you can move around and reposition. Use your design sensibility to make the place look funkier with cost-effective wallarts, installations, or maybe even a bright colored wall.

Be A Cautious Spender - Manish Sinha, Founder, Skrilo

Spending is easy. Spending on quality growth is not. Ask any start-up and I am confident that the foremost challenge in building a business is the balancing act of nurturing the growth wave and managing the cash burn. The pitfalls are all waiting to trip you over.

Keep The Budget Small Initially - Kaushal Dugar, Founder and CEO, Teabox

It is very usual for small business owners to waste a lot of their capital, in the starting of their venture. Every new strategy and idea that dwells in the respective market, attracts them and hence wasting of money can happen across.

Some of the common issues that float first are - Office space, Marketing, staff, advertising, developing numerous business plans, unnecessary infrastructure and so on. Over the years, every business owner goes through the same and learns through each stage of his growth.

Managing Working Capital - Satyam Kumar, CEO and Co-founder, Loantap

In my opinion small business owners are not able to factor in efforts of collection (from debtors) and assign a cost to it. This also leads to under-pricing of interest cost (trade interest / discount). Thirdly, managing working capital is crucial.

They very often mix personal finance, capital requirement and working capital. This leads to strain on working capital and results into costly purchases or higher delivery.

(This article was first published in the December issue of BIZ Experiences Magazine. To subscribe, click here)