If you’re running a business, it can be tough to mentally separate your work finances from your personal finances. Many entrepreneurs find it difficult to pay themselves, even when they know they can afford it, and even the most successful entrepreneurs can have trouble managing their personal income and expenses. FreedomPlus has collected some of the best financial tips for busy entrepreneurs to implement in both their personal and professional financial spheres.
Track business expenses. Traveling to clients, conference calls, laptop chargers and carrying cases, training courses… FreedomPlus has found that even the most organized of entrepreneurs can easily lose track of exactly how much they’re spending over the course of running their business. FreedomPlus recommends keeping a separate notebook or backed-up virtual spreadsheet tracking all of the money that you spend running, promoting, or improving your business- if you’re not sure how much you’re spending, there’s no way that you’ll be able to accurately claim your expenses when tax time rolls around.
Set personal financial goals that are separate from your business goals. Setting goals is one of the most important steps to growing your business- goals give you something to work towards, and helps you devise an intentional plan to guide your actions for the next day, month, or even year. Resist the temptation to conflate your business goals with your personal finance goals; if one of your personal goals is to buy a house or take an international vacation next year, be sure that you are not cutting funds that would typically be going towards business expenses to reach this goal. FreedomPlus recommends that you create a list of personal goals that are separate from your business goals, and keep the cash streams to both sets of goals as divided from one another as possible.
Have an emergency fund at the ready. Business runs in cycles- one minute your product or service might be the hottest thing on the market, the next you may be scraping just to get through the quarter. Keeping an emergency fund is especially important for entrepreneurs because, unlike those who are bound to a salaried arrangement, there is no guarantee that you will make enough money to keep yourself afloat through any given quarter or cycle segment. When business is good, make sure you are setting aside at least a little money so you’ll have an emergency fund should you need it in the future.
Act your wage. As a business owner, it can become all too easy to fall into the trap of living above your means. At a traditional job, you can’t dip into profits or money that is intended to be devoted to growing the business or advertising for your own personal wants and needs; as an entrepreneur, you control the cash flow, so there’s no one stopping you from skimming a little off your tax account or marketing budget for that new watch or pair of shoes. Sit down and track all of your personal budgets, and create a monthly budget for personal expenses only- then, resist the temptation to use business money to fund a lifestyle that you can’t afford.
FreedomPlus knows that it can be particularly challenging for business owners to keep their personal finances separated from their business accounts; as an entrepreneur, you have to pull double-duty when it comes to managing income and expenses. However, with the right budget, a track-record of all of your expenses, and some planning ahead, you can keep your business goals within reach- while still enjoying a lifestyle that you love and can maintain.