Starting a new business takes a lot of time, effort, and energy. Setting a good financial foundation helps ensure that your business will be stable while it grows. Here are nine tips to help you get started:
- Set up business accounts. Don't mix business and personal money. Open a new checking account for business purposes only.
- Go paperless. Tame the paper piles and save trees! All it takes is a click of your mouse to opt out of paper statements. When they arrive in your email, handle them and then file them virtually.
- Create a budget. This is key to making sure you're allocating your money well. All you need is a notepad and pen. List your recurring expenses. Then add up your income. Subtract expenses from income. Your goal is to have a positive number. A negative number means you're going into debt.
- Open separate savings accounts. Besides a checking account, it's important to have a few savings accounts. Earmark these for things like taxes, business insurance, and an emergency fund.
- Buy an adequate amount of business insurance. This may seem like a useless expense because you don't benefit from it when business goes well. When it doesn't, you will be glad you have it. Ask your agent to make comparisons for the best price on a policy that meets your specific needs.
- Set up an invoice system. Try sending digital invoices rather than paper. This saves money but also time, and you may get paid faster. You can create an invoice template and customize it each time. Another option is a service like Freshbooks®. They let you track time and expenses for each client, and send the invoice electronically.
- Save for the unexpected. Call it a rainy day fund or an emergency fund. Aim to build up a savings account that equals three to six months of expenses. You may use this when you lose a client or when you have the chance to buy up a lot of inventory at rock bottom prices.
- Make financial goals for the coming year. It's important to have goals that you aim to meet. Make them realistic but push them a bit out of reach to challenge you and your team.
- Hire professionals. Your clients hire you because you're a pro in your industry. You should do the same when it comes to things that are outside your wheelhouse. This might be taxes, setting up a website, ensuring that your online store is secure. It might seem expensive upfront, but they'll save you time and get the work done better than you could do it.
These tips won't ensure that you have a record breaking year. But when you follow them, you will find that your money goes further and you get more done.
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