Whether you’re a new business owner or you’ve been invested in your business for some time, we’re going to review a few key items to ensure your business is set up for financial success.
Keep Your Business and Personal Funds Separate.
For various legal and liability reasons, it is always best practice to have separate business and personal accounts. This means you should have a business checking account, and a business credit card, in addition to your personal accounts. There are many articles written about the importance of why to separate. Here’s one to check out.
Pro tip: You can move funds at any time from personal account to fund your business account. In your recordkeeping, you would record it as owner’s investment.
Review How You Collect Sales.
Once you have your business bank account, you need to consider how you are collecting sales. You may have your own website, or Shopify, or just a document that you update to send to clients. As I mentioned above, you should have separate business accounts, and that includes separating PayPal, Square, and Venmo business vs. personal. An important key to ensuring up your business success is knowing how and when you collect sales.
Pro tip: Many bookkeeping software programs have the ability to send invoices and collect payments. They are competitive with their rates compared to a credit card processor or PayPal and Square.
Be Consistent in Reviewing Your Business Transactions.
There may be times when you log onto your account and notice a transaction you don’t recognize and know you need to look into it, and then time goes by and you forget about it until months later. Forgetting details about transactions and even fraud can be reduced if you are regularly reviewing your business transactions. I have made the habit of looking at my business accounts almost daily (usually 4-5 times a week) and entering my expenses weekly so I don’t forget what the transactions were for. Developing a consistent habit of reviewing your business numbers is a great way to set your business up for financial success.
Pro tip: Choose a day of the week (mine is Wednesdays) or day of the month (like the 15th) to schedule time to sit down and review your transactions. This builds a habit and you will be rewarded by making better business decisions based on your financial data.
Invest in Yourself and Your Business Will Grow.
One of the best ways to grow your business is by investing in yourself. That can look like working with a coach, reading personal development books, attending trainings and seminars, and listening to podcasts and audiobooks about your industry. In his book No Excuses, Brian Tracy suggests 3% to invest into yourself annually. So if you are currently making $25,000, invest around $750 in personal and professional development. I have found this is a key element in clients that are set up for financial success. One place you can start is reading this blog on asking the right financial questions.
The best investment you can make, is an investment in yourself. The more you learn, the more you’ll earn.Warren Buffett
Pro tip: If you want to increase your income, increase your investment in yourself. If you want to earn $50,000 a year, invest $1500 in yourself. Like Brian and Warren say, it will come back to you full circle.
The opinions expressed in this article are solely those of the writer and do not necessarily represent those of The We Spot, it’s employees, sponsors, or affiliates.