Although many people want money, being good with money and being able to get your business finances in order can look stressful. However, finances don’t have to be intimidating.
This week, we’re bringing you 10 tips on how you can get your business finances in order.
1. The Hard Stuff First
Deal with your financial beliefs and behaviors that hold you back. For example:
● Do you go into debt no matter how much money you make?
● Do you undercharge your services?
Dealing with the root causes of your money woes is the hardest part of becoming financially literate. But it’s the best place to start. This is because new money beliefs and behaviors take a long time to seed and germinate.
Start with the hard stuff first because it will be the most beneficial to your financial growth!
2. Make It Personal
Wellness professionals often tend to pay themselves last, if at all… But the whole reason you are in business is to provide for yourself (and perhaps your family)!
So you must figure out what your salary or wage should be based on your needs. Make your salary a business expense, not an afterthought.
3. Separate Personal from Business
If you haven’t already, make sure that your personal and business accounts are separate. This means a separate checking and savings accounts.
Heading to the bank and creating a separate account will help you get your business finances in order.
4. Track it!
Use a money tracking application for both personal and business expenses. This is so beneficial to being in control of your finances and knowing where everything is going!
For personal finances, I like to use Mint.com, which is free. But for business, I prefer to use QuickBooks, which is a paid service.
If you’d like to explore alternative applications for tracking your money, many people also love using the following:
● For personal use, You Need a Budget is a paid service.
● For business, WaveApp has some free functions that can be used to track those expenses.
5. Work with Real Numbers
You don’t want any guesswork when it comes to finances. It’s essential to look at actual numbers while making personal and business budgets.
When making your budget, don’t just guess numbers off the top of your head. Look at your bank account or use a tracking application to get accurate numbers.
6. Pinpoint Your Pricing
Figure out exactly how much you should charge to cover all of your expenses. Make sure you’re making a profit, but offer discounts if you choose to.
Many wellness professionals often base their prices on their colleagues’ price structure. But they never determine what price point they genuinely need to cover their expenses.
In our new course, Building Your Business Backbone, we go in detail through the steps you need to take to figure out how to pinpoint your price exactly.
7. Continuous Cash Flow
How is cash flowing in your business? Are your expenses overwhelming you?
It’s essential to account for your needs and make adjustments as you go to make sure that you’re always in the black. This could mean rearranging some of your business expenses to make sure that you’re always benefitting.
8. Create a Legal Tax Structure
Do you want to own a sole proprietorship? Or would an LLC or Corporation be better for your business?
Looking into this and sorting out your tax structure will be crucial to staying on top of your business finances.
9. Building Your Financial Team
If you’re alone in your business and are good with tracking your business finances, then having a bookkeeper can be optional. But suppose you have employees or are not good with keeping up with business finances. In that case, we suggest hiring a regular bookkeeper.
Either way, having a tax specialist is worth its weight in gold.
There are several types of tax specialists. Do you know which one is right for your business?
10. Prepare for the Future
Being self-employed, you will need to create your own retirement funds. There are several types of retirement accounts available for self-employed business owners.
In fact, some retirement accounts allow you to save way more than a traditional IRA or 401K!