Running your own small business can be hard work, but don’t make it harder on yourself by making sure you are on top of what you can control. Finance can be tricky to navigate, but with some forward planning and a little restraint when it comes to spending, it could be smooth sailing for you. Here are some tips on how to take care of your business finance.
Don’t mix pleasure with business
When running your own business, it’s always important to keep your personal and business accounts separate, or things could get more than a little messy around tax time. Never use your personal credit card to make business purchases – it’s best to get a separate credit card for business-related transactions to help build your business credit. Be careful not to get too crazy with using your business credit card though – having a good credit rating for your business could prove valuable in the future.
Avoid ongoing debt
Having a bad credit rating can have a negative effect on your business. Pay off any outstanding debts you have as soon as possible. Monitor your spending, or take up a second part-time job if you have to. Your hard work will pay off once you are debt-free and running your own successful business.
Think before you spend
In the first couple years, you will tend to spend more on your business than you make, so try to limit that expenditure by thinking twice before purchasing anything (whether for business or personal reasons). Think about whether or not you really need to buy that item, and if it’s for the business, whether it will help or hinder the business growth.
See an expert
Hiring a professional accountant or tax consultant could prove to be an important investment for your small business. A professional accountant will be able to advise you on how to minimize your tax liability, which reduces your risk of making any terrible financial mistakes. They can also take care of your taxes when the end of the financial year rolls around, which is another stress off your shoulders.
Have a solid business plan
Being a small business owner means that you are your own boss, and you are in control of your financial future. However, this is a double-edged sword and could land you in financial distress if you don’t plan ahead. Before you commit to anything, set some business goals for yourself and stick to them. Write up a business plan, and check back on it every so often. Business plans are a constant work-in-progress, so feel free to make changes along the way to reflect your businesses current state.
Trevor Jackson runs his own small business, and his experience has taught him the ins-and-outs of business finance.