While operating your own business has plenty of perks ranging from turning your dreams into a reality and becoming your own boss, there are a number of setbacks that come into play, too. Whether your business is small or large, your biggest challenge will likely be managing your money. There’s no denying the fact that figuring out how to keep your finances in order can be a bit of a headache, but it’s a must if you wish to keep your business afloat.
Fortunately, there are some basic money management tips all business owners can use to better oversee where their money is going. In this post, we’ll highlight our 4 best tips to help you manage your finances like a boss.
Tip #1. Separate your personal finances from your business finances
Managing finances for a small business can be an especially challenging endeavor due to the fact that there’s no clear separation between your personal finances and those of your business’. And because most small businesses are considered pass-through entities (which means that revenue technically flows through the business to the business owner) striking that balance between business finances and personal finances can become easily muddled.
If you’re a small business owner, It is incredibly important to create as much separation as you can to clearly define where personal finances end and business capital begins. Take our word for it—mixing the two can make filing taxes unreasonably complicated and bookkeeping a complete nightmare.
To help create a clear distinction between your business and personal finances, we recommend using accounting and bookkeeping software. This genius technology is designed to help you do everything from conduct payroll to manage your financial health.
Our favorite small business bookkeeping programs include:
- Zoho Books
- Sage 50cloud
Tip #2. Hire a financial advisor
Hiring a financial advisor may be expensive upfront, but for some, it can be a worthwhile investment for long-term planning. Maybe you feel hopeless trying to manage your money, or maybe you just want a second opinion before making a big decision—whatever your reasoning, having a financial advisor in your court can deliver the peace of mind and organizational excellence you and your business need. Whether you decide to go with a larger firm like Cetera or Rowling & Associates or opt for a freelance financial advisor, make sure to do your research to ensure you’re saddling yourself up for success.
Tip #3. Stay ahead of tax season
The last thing you want to deal with as a business owner is trouble with Uncle Sam. There’s no arguing that filing your individual taxes is an already difficult endeavor, but when you bring business taxes into the mix, the challenge grows even more apparent. In order to stay on top of your taxes, you may find it most useful to hire a professional who understands all of the intricate ins and outs of the U.S. tax code.
Hiring help can provide you with a number of valuable benefits including:
- Lowered levels of stress and pressure on you
- Precise and accurate filing
- Opportunity to take advantage of tax deductions and credits
Tip #4. Consolidate operational costs
Whether you’re overspending on your office space or your inventory, you can catch these instances of poor budgeting early on if you have a process in place that monitors your outgoing expenses closely. There are a number of ways to consolidate your operational costs, both big and small. This could entail rethinking your office format or simply swapping out your light bulbs for more eco-friendly alternatives.
When it comes to the business world, cutting down on costs usually consists of either embracing remote work options or outsourcing projects.
- Go remote: Paying rent for your office space is likely one of your largest money suckers. You can relieve yourself of these costs (if it makes sense, of course) by going full remote. Allowing your employees to work from home is a huge shift that takes plenty of careful planning and calculating before executing, but it’s a change that could help you cut costs and allocate that money somewhere more useful.
- Outsource: There are so many different types of work your company likely needs but doesn’t necessarily require an in-house employee to complete. From graphic design projects and analytical audits to blog copy and video-editing, outsourcing to a talented freelancer is just one click away.
How do you manage your business’ money? Do you have any tips we didn’t mention? Open up the discussion in the comments below!