Getting started in business is exciting! But it’s also scary, and a little bit (okay, a lot) stressful. As a business owner, you don’t just get to do what you went into business to do: make jewelry, design websites, coach clients, help others, you get the picture.
Nope, there’s a whole other side to running a business: the finances. To make sure you stay in business, you need to get your books set up for success. While I always recommend getting some professional help with this, there are some things you can do on your end to make sure you’re organized and tracking the right things in your business.
Look at Systems
I’m not just nerdy with numbers; I’m a systems nerd too. Be sure to get your systems in place as you grow your business. Use a calendar scheduler, have a workflow that’s customized to your products or services, look at your onboarding process for new clients. All of these things will help to save you time and money in your business, plus make your life a lot more enjoyable!
Separate Business from Personal
Looking at the financial side, it’s absolutely imperative that you separate your business finances from your personal finances. This is non-negotiable. Period. And I find it really scary, the number of people I talk to who lump all their money in one place—even when they’ve been in business several years.
How will you know if your business is profitable if your personal finances are mixed in with your business’s? How will you determine a budget for your business? How will you know it’s time to stop buying #allthecourses and just work in your business? I could go on and on here, but instead I think I’ll just write a blog about it. Stay tuned!
Find Your Overhead
Your overhead is the cost of doing business. You need to determine how much you need to spend each month to keep your doors open. Consider web hosting fees, internet, administrative services, rent (for brick and mortar shops), electricity, email provider fees, etc. Sit down and make a spreadsheet to help you do this, and look through old bank statements so you don’t leave anything out.
Of course, you also need to know how much you need to make (personally) to survive. This is especially important if your business is your primary source of income. List all your must-have living expenses, like rent or mortgage payment, food, utilities, car payment, gas, etc.
Add the two numbers up, add 25 percent for taxes, and this is what you’ll need to bring in for your business each month, at a minimum. Of course we all like to invest in our businesses and have a little fun, too. So aim higher, but at least you know your minimum.
Create a Budget
If you’ve never worked with a budget before, it’s time to start. Not only will a budget help keep you on track with your bills, it can also help you decide if and when you should be investing into your business. With all the courses, technology tools, virtual help, etc., it’s easy to spend and invest. But if you’re not making any money right now, free and low-cost options (and DIYing it) are your best bet.
Of course, I love QuickBooks Online to manage finances and my budget. It allows you to add categories, so you can track your spending for different budget items, like employees, professional development and day-to-day expenses.
Seek a Pro
If you’re struggling with how to set up your budget or you need help separating personal and business expenses, I recommend seeking out the help of a pro. A bookkeeper can not only set up systems for you, but they can also help maintain them for the long-haul. A win-win for your business and your bank account. If you’re ready to get started, let’s chat!
