Owning your own business can be an exciting, yet nerve-racking venture all at the same time. On one hand, being your own boss allows you the freedom to manage your own workflow, set your own schedule, and plan out your life the way you intend. However, with that freedom comes the responsibility of designing a successful brand or company on your own, oftentimes without anyone guiding you through the process.
One way to ensure your business will last through the trials of expansion and development is to outline your financial goals and projections early on. In order to thrive in a competitive market, you must be able to sustain your business financially.
Separate Personal and Business Expenses
It can be tempting to want to dip into your personal savings account when you own a business, especially as an entrepreneur that has not yet started employing others. What’s the difference when it’s all your own money? But the habits you build in the initial stages of owning a business will likely carry on and influence your future success in many ways. That is why it’s important to create financial stability for your business to stand alone without your personal money earlier rather than later on.
Many entrepreneurs choose to separate their business and personal finances to help them track their income for taxes or to write off business expenses. If you are taking out business loans, this can be more challenging when your personal finances and credit are tied to your business finances. Starting off your business with separate personal and business accounts will provide more clarity and organization and better prepare you for expansion in the future.
Track All Expenses
It really pays to track every expense as a business owner, big or small. First and foremost, you need to know where all your money is going at all times. If you’re like most people who head to the bank, withdraw cash, then wonder where it all disappeared to a week or two later, this is for you. Save all transaction receipts in a designated file or online document that you can resort back to at any point. Another way to stay on top of your finances daily as an entrepreneur on-the-go is to sign up for a mobile banking account. By doing this, you can save money automatically while placing your full attention on running your business. Mobile banking allows you the freedom and flexibility to check-in with your finances when you’re traveling for work, out of the office, or considering a large purchase.
Cut Costs Where You Can
As an entrepreneur, it’s important that you weigh many of your decisions based on your finances. You’d be surprised how many ways you can cut major costs without sacrificing professionalism and business opportunities. For example, you can save on office space if you’re working for yourself, at least during the initial stages of development. To do this, simply set up a small space designated as your home office and maintain your regular work schedule, this way you don’t have to throw extra money into renting space right away.
Another way to save money, without committing to the responsibility of hiring employees, is to outsource projects. If you need a job done right but are not quite ready to hire someone full time, reach out to project freelancers and maintain the relationships you build for future employment opportunities. You should also be utilizing technology to help save on travel whenever possible. Unless it’s imperative that you arrive at a business meeting in person, set up a web conference or call into the meeting. Not only will this help you save on travel expenses, but it can also save you loads of time, and as we all know, time is money.
Use Social Media to Promote
If you are looking to effectively market your product, service, or brand social media is a great option for any entrepreneur. The cost to start an account on social media is virtually free and it allows you to make connections within your desired community. There is no need to spend your money on traditional marketing efforts that may not even help promote your business the way you intend. If you don’t plan to utilize paid advertising on social media, it can still help you form relationships, join communities, and receive tips from experts in your space which will help you succeed as a business owner. When used in the right way, social media can be a game-changer for many people, especially those budget-conscious and just starting out.
Work with A Professional
If accounting and finance are not your areas of expertise, you’re not alone! If you feel like you need assistance when it comes to managing money, hire a professional financial advisor that can help set you up for success. Since the first few years of your business are so critical, why take that risk and allow your business to fail because of its financial state? A professional advisor can review your accounts, make suggestions and recommend options for you based on your projected timeline and growth. This will help reduce finance-related stress you might be faced with as an entrepreneur and help you avoid making financial mistakes that could be difficult to recover from.
Building a successful business takes more than a little time and energy. It requires your ultimate attention, persistence, and planning in order to be successful. Many entrepreneurs do not make it past the first few years of their business simply due to financial instability. Realizing the importance of budgeting and financial allocation while you’re building a foundation will allow your business to grow into the vision you’ve always had.