As a small business owner, you’re responsible for everything—from saving on office supplies to making sure folks get paid to knowing what taxes to file and when.
A big part of success is educating yourself on how your personal finances affect your business and vice versa. Here are a few moves that can help keep your personal finances healthy while you grow your business.
Keep track of your monthly income and expenses. Your business income can vary dramatically from month to month, depending on the season, number of sales, trends in your market, etc. These could potentially cause your average bottom line to be lower than anticipated.
That’s why it’s critical to track your monthly income and then budget accordingly. As your income grows and shrinks, you can adjust your spending.
Set up an emergency fund. This money can be used to cover unexpected costs, such as unanticipated repairs or an illness. But, when you own a business, it can also help you make ends meet if business is slow or, say, if a global pandemic shuts down the world economy. Save up 6 months’ worth of spending in an account you can easily access in a pinch!
Know what you owe, to whom, and when it is due. Personal debt can be a serious challenge for small business owners. It may motivate them to make foolish financial decisions to pay off what they owe, regardless of the consequences.
That’s why it’s important to manage your finances responsibly so that debt doesn’t become a problem. Adopt a debt management strategy to reduce your debt ASAP. Your business may benefit greatly from it.
Get professional advice if you need help with your finances. If it’s at all feasible for your business’s budget, get a professional set of eyes on your books. They’ll help you navigate the world of finances, share strategies that can help make the most of your revenue, and show you how to position yourself for future success!