Nobody likes balancing their checkbooks, but someone’s got to do it.
So you’ve opened your own small business? Well, good for you! It’s great to see the entrepreneurial spirit alive and kicking. That being said, I hope you weren’t expecting being a business owner to be a cakewalk, because guess what? It ain’t. But hey, nothing worth doing in life is, right? The first thing you need to get a firm grip on is your business’ finances. Once you’ve got your books in order, everything else should fall into recognizable patterns. Here’s a few tips to keep things ship-shape.
Start that Emergency Fund
Starting a small business is not unlike gambling. You don’t really know if you’re going to make enough money to support yourself and the business itself, nor will you know until you’re already in the thick of things. In the event something happens that hampers your business’ operations, you want to make sure you have a fund you can fall back on to keep everything afloat until things stabilize. If you’re making a consistent profit, try to set aside whatever you can.
Keep an Eye on Your Credit
Depending on the kind of business you’re running, you’ll probably have to make regular purchases with credit cards. Thing is, other business don’t particularly like working with those with bad credit. Make sure to always pay your credit bills on time, even if all you can make is the minimum payment. If you don’t pay your bills, your credit will suffer, and at that point, don’t be surprised if other businesses won’t give you the time of day.
I’m guessing you’re not going to be running this business for the rest of your life. Unless you’re really, really dedicated to it. Hey, don’t let me judge you. If you do intend to retire someday, though, you wanna make sure you have the money to do so. Set aside a fund (separate from the emergency fund) and put it in a savings account. You’re not going to have a human resources department to do this for you; it’s all on you.
Once your business is merrily chugging along, you’ll want to make sure you have a couple of extra sources of income for a rainy day. Get a stock portfolio started and keep a few investments on the side. Who knows, one of them could save your bacon way down the line.
One last thing to remember: if at any point, you’re starting to feel overwhelmed, there’s no shame in consulting a professional. Sometimes, certain situations can be a little too sticky for a newcomer to logic out themselves. That’s okay; financial advisers are available to get you back on track.