You finally did it. You decided to start that business you always dreamed of! You’re happy! You feel good about your choice! You’re ready to take on this next chapter in your life! Life is good! You feel unstoppable! The world is your oyster! Nothing can stop you!
Now, back to reality…
See, deciding to start a business is the easy part. Following through with that business and all that comes with that decision is the hard part. For example, how do you make sure your business not only makes money, but allows for you to live comfortably in the process? To start a business means you need to spend money to make money and unless you’ve planned and prepared appropriately, this sometimes stops entrepreneurs from moving forward with their plans or worse, prevents already established businesses from continuing to grow and expand.
As an entrepreneur myself, I have gone through a lot of trial and error in this department and in doing so, have learned some key money management tips along the way which have helped my business stay financially stable. Now, I am not a financial planner, I do not have a degree in business, and I am in no way trying to give formal financial advice. These are simply tips which worked best for me. I will always recommend you meet with a certified financial planner prior to making any big decisions for your business. So, think of these as helpful tips on where to start your money management journey!
- Have a plan. I know, I know. It’s super exciting to start your own business but don’t let that excitement lead to impulsivity. Have a plan in place and ensure that plan includes budgeting, especially if you’re leaving your 9-5 to start a new business, cold turkey.
- Have emergency money saved up. Having 6-8 months of savings as a safety net is not only going to offset some of the anxiety you may be feeling jumping into a new business venture, but will also ensure you have a safety net in place in the event one is needed. A lot of people have the mindset that not having a safety net in place will give them “no room to fail” which is wonderful and inspirational, but it still makes the most sense to have something saved… just incase. You can still have that go-getter, failure is not an option attitude, with a safety net.
- Start paying down your highest interest rate loans/debt. For example, credit card debt, student loan debt, etc. Starting a business means you are going to be spending money, so if you are already in debt, you don’t want to accrue even more debt, especially at a high interest rate.
- Look into life insurance, disability insurance, and ways to save for retirement. When you come from a 9-5 corporate/agency job, these things are typically taken care of without much thought on your end. When you’re an entrepreneur, it’s your responsibility to save for your future as no one else is going to do it for you.
- Keep your business and personal accounts separate. Keeping all of your money in one account is just going to lead to confusion and chaos. Keep your business account separate from your personal accounts. This will help with your budgeting, taxes, expenses, and accurate yearly projections.
- Hire a professional. Whether it be a financial advisor or an accountant or both, turn to the professionals to help you make the best financial choices for you and your business. Yes, these professionals will cost you money, but it’s an investment you can’t afford not to make.
- Invest your money. This is something so many shy away from out of fear. Fear of losing money. Fear of the unpredictable or unknown. Trust me, I too was someone who hated the idea of investing because I was so afraid of what was going to happen to my money. BUT! There is actually a lot of evidence to support the value and benefits of investing which simply can’t be ignored. Do your research, talk to a professional in the field, and learn more about this option.
- Do your own research. Read blog posts, read newspaper and magazine articles, read books, listen to podcasts, consult with professionals, but do your research when it comes to money management so you can learn more and make informed decisions which work best for your business. As I mentioned, I don’t have a business degree. I took a few business classes in college but the bulk of my knowledge came from doing further research. A couple of my favorite resources are Suze Orman and Dave Ramsey
You can absolutely achieve financial success as an entrepreneur, but that really isn’t going to do anything for you if you’re not saving in the process. Remember, we can spend money just as easily as we make it, so smart money management is key to not only a successful business, but a comfortable personal life as well. And remember, you don’t need a business degree to start a business and make smart financial decisions, you just need to make sure you do the important work along the way.
I would LOVE to know what spoke to you today and encourage you to comment below and share with me!
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