Ghanaian entrepreneurs are being urged to pay closer attention to financial management as a leading factor in the success or failure of new businesses.
Experts warn that poor financial habits can quickly turn a promising venture into a struggling one, particularly for startups navigating the complexities of early growth.
“One of the most frequent errors is poor budgeting,” said a local business advisor. “Without a clear plan for income and expenses, cash flow can easily fall out of balance, leading to overspending and operational strain before the business has a chance to grow.”
Mixing personal and business finances also ranks high among common pitfalls. Entrepreneurs may find it easier initially, but as the company expands, untangling accounts becomes complicated. This practice complicates tax filing and obscures true business performance.
Opening a separate business account is recommended to avoid these challenges.
Tax planning is another area where many startups falter. Without understanding obligations or seeking guidance from an accountant, businesses risk overpaying or facing penalties.
Experts stress that it’s not only about knowing rates but also about claiming eligible expenses and staying compliant.
Tracking expenses meticulously is essential, especially when multiple people have spending authority. Small daily purchases or larger operational costs, if unrecorded, can quickly add up, making reimbursement and deductions difficult to manage.
Finally, overreliance on credit can jeopardize a young business. While loans or credit cards may help cover gaps, accumulating interest without a repayment plan can lead to mounting debt. Sustainable growth relies on careful borrowing and spending within means.
“Avoiding these five mistakes won’t guarantee success,” the advisor added, “but it significantly increases the odds. Good financial habits build a foundation capable of supporting long-term business growth.”
For Ghana’s burgeoning entrepreneurial sector, cultivating strong budgeting, accounting, and tax practices early on is increasingly seen as critical to sustaining innovation and competitiveness in a challenging market environment.
About The Author
