As entrepreneurs ourselves and being surrounded by entrepreneurs through Entrepreneurs Organization (EO) and other organizations, we know what it’s like taking the leap and starting your own company. For some, the financial aspects of the company can be the most daunting. Here are six tips you should know as you start your business.
1. Get educated
It’s important to learn the financial ins and outs of running a business. Read up about investments, balance sheets, cash flow plans and other financial needs, even if it’s just the basics, to take care of your company.
2. Keep personal and business finance separate
By separating your business and personal finances thorough bank accounts, assets, credit cards, etc., your personal security will be safer and your business credibility will be greater. This is especially necessary in jointly owned businesses. Separating finances will also help you manage taxes, bills and other financial issues you have.
3. Save as much as possible and avoid extravagant expenses
Build a cash reserve for your business to prepare for the financial pitfalls that may come. Watch your spending and review your needs before you make a purchase or spend money on a service. This includes hiring more people when your company isn’t financially ready or buying unnecessary products or supplies. Instead, hire multi-talented people to fit several roles at your company or hire college interns. Also, look for re-sale shops to invest in office supplies or equipment when possible.
4. Invest in Important Services
While it’s necessary to save and watch your spending, don’t penny-pinch on important services such as accounting and legal help. If you don’t have a peer who can help you for the payment of a nice meal, solicit recommendations from your trusted peers. Meeting and talking with the experts early in the game can save you time and money in the future.
5. Set financial goals
What’s a realistic financial goal for your company? Where do you want to be in three months? A year? Set goals to track your progress and give you motivation. Goals will also help you monitor your savings and spending budgets.
6. Pay yourself a salary
Your income is important when it comes to company goals, budgets, and future reviews of your financials if you need investments or working capital. Take your personal financial statements in consideration and then calculate based on your worth.
Becoming an entrepreneur is a big step and getting your financials in line is necessary to be successful in the long run. If you have any questions or are ready to grow your business with working capital, we are available to share our experiences and/or the resources to lead you in the right direction. Contact us today.
For all of you seasoned entrepreneurs, what financial tips would you add to this list?