Starting and running a business requires many things; even you start it as a side hustle. It takes your time, energy, resource, and your determination. There are days things are going smoothly, and days nothing works. That lets alone you work on it as a side hustle and have your full-time job to take care of. I am there, and I understand it. In between many things, you need to take care of marketing, selling, website, customer service, social media, and financial tasks. Do you wonder what you should do in terms of finances and accounting, and tax? Who has time to even think about it?

     This week, I give you seven useful financial tips a small business owner should follow.

1) Setting Up A Budget But Be Flexible

     A budget gives you an overview of how your business makes money, where your expenses go. It gives you guidance that allows you to see your business picture ahead of time. By doing it, you can easily make a business decision. You do not need a complicated budget spreadsheet. A simple one where you plan down the revenue and cost. Of course, having a professional helps you set up an excellent budget, but you do not need it when you start. Do not get caught up in a perfect thing!

2) Setting Up With Your State And Organizing Your Company And Protecting Yourself From Liability.

     You are researching how your state requirement about business registration is the right step. You can also talk to a professional like a tax accountant or a Certified public accountant on setting up a limited liability company and how it benefits your business. I believe that setting up the right company structure helps you protect your personal assets from liability. Some may think about an S corporation, but an S corporation is where we select the way we report our business income, and it is not a type of entity. Whichever route you choose, understanding this part is essential for setting up your business.

3) Setting Your Business Bank Account Separate From Your Personal Account.

     I understand it; when you start your own business, you put the funds into your business. It is so easy to use money from your personal bank account to pay for your business expenses. I suggest that you open a separate bank account for your business because a couple of reasons as below:

• It helps to separate your personal costs and business expenses.
• It reduces the complexity when you file your tax.
• It is easier to organize your receipts and help you analyze your business results.

     You can choose to open an account with your local bank because it is easy to build a relationship with them. You can call them and share your needs with them. It is better than many big banks.

4) Know Your Price And Be Good At Setting Price

      Pricing alone is an art, and for many business owners who start, it is quite challenging. Getting your price right can help you build a strong foundation for your business and creating your profit. Be clear about what you want to achieve – how much you want to earn from your business.

      Pricing too low will result in a loss in your business because the revenue cannot cover all of your expenses. Low prices will not help you sustain your business for a long time. And, I know many new business owners usually do not have the confidence to position their price. Yet, understanding pricing right and confidence in your price is necessary for your profit.

5) Managing Your Business Expenses And Income Often

      Over the years, working with many small business owners, I’ve learned that many owners do not like managing your business finance. You either do not have time or do not want to do it or both. You work so hard for your business, but you will not develop the right strategy if you do not review your business results. Reading your number will reveal a lot about your business performance. The ways I see it, there is nothing more important than really digging into what does well and what does not work.

      I wrote a post about common financial KPIs for your business in the link here so you can read more.

      If you do bookkeeping yourself, making sure you keep track of your transaction and book it correctly. If you have someone, do it for you, schedule in your calendar when you review the numbers and ask many questions to understand it. I’ll advise that you may need to hire someone to do the bookkeeping for you because it frees your time to focus on what you are doing best in your business. A friend of mine shared that she did not have enough money to pay for herself before hiring a bookkeeper, but she made a profit since she hired a bookkeeper. You can see that paying someone to do the number part can result in a profitable business.

6) Find A CPA You Trust And Love To Work With

      I may bias this, but you can find so many articles writing about how important it is to have a good CPA to help your business. Good CPA can give you valuable advice as below:

-How to manage your business numbers better.

-Where to cut the expenses.

– Show you the things that are not working on your number.

– What expenses are tax-deductible, tax planning for you.

     Some may think that a CPA only does about tax, but in reality, they can be a CFO for your business too. Finding a CPA that can help you both in your business and your personal finance will be gold. And, there are many good CPAs out there; find one that works well with you.

7) Determine How You Will Get Paid

      As business owners, some may not be sure how they get paid regularly from their business. Especially with many businesses, you do not have regular income like a 9-5 job where you receive paychecks every two weeks. Talking to a professional like a CPA can help you figure out this part. Here is where to start: check out your financial projections for the whole year. And listing out how much your living costs. And working from both these two factors to calculate how much you need to get paid monthly.

      If you start as a side hustle, you can plan on using your business’s earnings depending on your goals.

Conclusion

     So there you have it, just a few notes on setting up your business financially successful. I’ll keep you updated with new notes and essential things for your business regarding the financial part. I would love to hear your feedback, and let me know what your concerns are. I am here to help you.