The secrets to being a winning small business owner.
We all know managing finances as a business owner is different from managing them as an employee. Here’s six tips to help entrepreneurs feel financially secure:
Manage Risk
Whether it is what you’re liable for or what you are investing into with time and money, always make sure to assess the risk in the endeavor. As a business owner, you’re aware that you are the one on the line for anything that happens, so check in on your employees even as risk management. It isn’t that you aren’t trusting, either; you’re maintaining the livelihood of the company that keeps both you and your employees afloat. Don’t be afraid to check in regularly.
Find the Sweet Spot
When taking on a new project or offering a new service, find the sweet spot where the money spent and money made is worth it. It could take some experimentation in mixing in-house work, outsourcing, and many other factors, but it is important to use your dollar in the best way possible to make the best product or service for your clients. Eventually, you’ll find the right prices to pay and charge and feel confident in the process.
Automate Bills and Keep Good Records
We’ve talked about it a lot, so this will be short and sweet, but it is paramount that you keep good financial records. We recommend using Receipt Bank as an electronic bookkeeping service and automating your bills to save you time and money. Nothing is more important than having a solid “paper” trail to keep your financial records in order and the payment process functioning.
Keep Separate Accounts
As a business owner, it may seem much easier to just merge your personal and professional accounts together, but we strongly advise against it. Not only will having separate accounts keep you out of hot water if anything negative were to happen in the future, but it will also make tax time easier when you can easily show what you’ve earned separately from the company.
Plan for the Future
This applies to both your business and yourself. Look ahead toward how your business will change and grow and how you will maintain the success of it, but also make sure to plan for your own success. Treat yourself like any other employee and invest in your future. Consider paying toward a Roth IRA or Individual 401K to start your journey toward retirement, which is inevitable. You’ll not only be setting yourself up well for the future, but for today, too, since the what you designate your money for determines how you’ll be taxed.
Hire Professional Advisors
You already know how important it is to talk with professionals, but it deserves reiteration. Nowadays, it can be all too easy to delegate responsibilities to electronic services to cut out the middleman, and often we do suggest using some of these services. Sometimes, though, you need a person to actively work with you, even if it is just to alleviate some of the personal responsibility. As we wouldn’t recommend substituting WebMD for your doctor, we wouldn’t recommend cutting out your lawyers, financial advisors, or accountants. The roles are important to your business’s integrity.
Feeling financially secure as a business owner may seem scant at the beginning, but with these tips, we are sure you’ll be well on your way to being a confident entrepreneur. Hire the right advisors, manage your risks well, plan for the future, keep separate accounts, and make everyday easier with payment automation, good record keeping, and finding the sweet spot. By implementing these tricks, you’ll have an easier day-to-day experience and an even easier tax season.
Have any question on how to get started? Get in touch your Account Manager or our very own Tim Shaw to get started feeling financially secure.