As Patrick Dwyer best describes Henry Ford, he has been a great inspiration for many entrepreneurs, a visionist who dedicated his life to innovation and resourcefulness. As a little boy he learned how things work, a common story in his childhood, tells that when he was 13 years old, he received a watch as a gift for his birthday and intrigued by how it worked he turned it apart and started learning on how machines were designed.
Henry Ford could have followed his father’s steps, however, he wanted to explore his own path. He worked for several big companies, like the Edison Electric Illuminating Company, where he learned a big deal about engineering and electricity. In this article, Patrick Dwyer lists 5 tips Henry Ford would give you about finances if he lived in today’s hectic world. Although a lot has changed, he did build one of the biggest companies that is still a leading company in the automobile sector, and his method can help you improve your business finances.
Be a continuous learner
Without a doubt Henry Ford was a man who was constantly learning, adding new abilities and updating his knowledge, even before starting with his Ford company, he had to be a pupil in Edison’s company, learning all about electricity, and with time he became chief engineer. When he built his company he started with one model, understanding and venturing with new models, came from his need of constant improvement and it’s with an open mind and will to learn that he could envision his new challenges which led him to success.
Who you surround yourself with matters, choose a great team
When Henry Ford started his third business venture, he knew he needed a great team by his side. He had the ability to identify and persuade young talented men who believed in his new challenge. They helped him make his vision come true. Henry Ford would recommend you, to form a great team to back up your company, helping you succeed with your product or service and increasing your income. Dare to hire the best, they are worth it. Hire people with desire to succeed and who believe in your dream.
Plan your taxes, beforehand
A great advice we are sure Henry Ford would give you is, that when creating a company it’s important to understand how the business world works, and that includes your taxes. Make sure you have that clear, what taxes need to be paid and if there are any deductions you can do, that can help you save money. Specially know when they have to get paid, paying them after can cost a big amount in interests. Month by month organize what taxes need to be paid, include them when you are doing budgets since the money needs to come from somewhere. Always have them as a monthly fee that needs to be paid and if you can pay them beforehand, you might even get a discount. Get your documents in order and for sure you will save money if you do them right. You can ask for an accountant for advice, that will save you a lot of headaches.
Setting up an accounting system is a must
Henry Ford learned after 2 failed companies that your accounting system is a must. Organizing your income and expenses, knowing how much it costs to make your product or to provide your service and how much you can charge, will help you have your finances in order and understand where your revenue comes from. Now today there are many ways of setting an accounting system, you could still have the traditional writing system of having it all in an accountant book but there are new systems and Softwares that can help you classify your finances. Ford was a technology supporter and he would recommend you get a system and make sure it has all the data you need, to understand where your revenue comes from and how you can increase it day by day.
Budgeting every dollar you spend on your projects
When starting a company, it’s important to have a financial plan, with long-term and short-term goals. With this in mind, the idea of a good budget and to know if your business is viable, you should spend less than what you earn. Analyze your regular expenses and always leave some extra for irregular ones that come along the way, after a few months of tracking how much you spend to make your company work, you will have a very good idea of how you can lower those expenses. When you make the decision of how much the product you’re selling will cost, you need to include all your expenses, that way you can cover them and even have a revenue. Include regular and irregular monthly obligations, not just how much the raw materials cost, how much time does it take to make one product and there you can calculate, workforce, amenities used, among other things you need to produce it, then add a percentage of revenue. As Ford recommended it’s not the employers who pay the wages, it’s the customer who should. Analyze all these expenses and you shouldn’t be struggling to pay your employees month by month and you will be heading to business success for sure.