Capital flight in small businesses

When a company starts its functions or is relatively young, it is important to make a balance of finances periodically, to avoid any problem that may arise at economic level and also to avoid diversion or flight of capital to destinations that do not do any good to the company, To avoid all this, every businessman must keep a capital control, making sure that all money that goes out and generates the company has an assigned purpose, without leaving out of the balance sheet any type of income, expenditure or capital.

If we want to identify the capital leakage in small companies, we can see it reflected through the activities that are performed internally or externally of the company and making a small analysis of spending or profit generated by each of them, from this you must design a priority scheme where the difficulty is specified at the economic level that represents each activity, thus we will begin to allocate more capital those actions that generate large profits and decrease the same in those activities that generate a considerable expense, making a gap where our capital is leaking.

To shield the economy of a small company is easy, because it does not fight against so many things that avoid making a decision that can suffer the consequences in the future, as is the case of large companies and to make a shield in the finances of these companies should begin by finding a destination for all products that are generated through productive activities, There are companies that produce slag or waste, which are the result of the production process of a certain utility and do not know what to do with it, it is to this fact that I refer my words, because it is necessary to seek a commercial destination for all of it or get the way to transform this waste into something productive.

A company will always find a way to shield its finances and avoid at all costs the flight of capital, but we can say that it is teamwork that will give the victory, since it is better to make a decision in an executive board, than to take it simply on a personal basis. It is important to always keep your small business finances under review, this will ensure that you maintain a safe path to success.