Last Updated on Apr 7, 2020 by James W
Whether you like to admit it or not, money is central to what you do as an entrepreneur. You need it to expand your business, and it’s also required to help you put food on the table. When you start a new enterprise, you need to ensure you’ve got enough cash to do both of those things.
But, what money management strategies should you follow? Do a search online, and you’ll come across dozens of different methods and techniques for keeping a tight grip on your business and personal finances. If you want to know the right ones, you’ve come to the right place!
Don’t start a business unless you can pay your bills for a year
It doesn’t matter how well you think your startup is going to be. For most people, it can take quite some time before their new businesses make a profit. With that in mind, you should consider saving up enough money to pay your bills for a year. That way, you don’t need to panic about your personal finances. And the financial decisions you make in your startup won’t get skewed by any money worries.
Open a bank account for your business
A lot of entrepreneurs use their personal bank accounts for their startups. The trouble with that approach is that it’s often hard to separate personal and business transactions. That’s especially true where cash withdrawals are concerned.
The process of opening up a bank account for your business isn’t a long or complicated one. There really is no reason why you shouldn’t have one!
Plan for your future
While you are building up your corporate empire, you need to think about what you’ll do when you reach retirement age. It’s important to consider some investments and pension options so that you have a nest-egg of money to live on once you do retire. Otherwise, you may only have a state pension to rely on, and we all know that hardly covers most people’s living expenses!
Plan for when you’re not around
What would happen if you were to die while you are self-employed? You need to make sure that your nearest and dearest don’t have to deal with the aftermath of your financial affairs. That’s why you need to organize a life insurance policy to take care of any debts when you’re gone. Plus, it can also leave your loved ones with some money to financially support them when you’re not here anymore.
The Internet makes it easy for us to compare details on life insurance policies. Check out insurancehero.org.uk/compare-life-insurance/natwest.html as an example.
If you are setting up an incorporated business, you should also look into director or executive insurance policies. Unlike life cover, they provide you with much-needed funds if an accident were to make you unable to work again.
Use accounting software for your business
It might be easy for you to just pay an accountant to deal with piles of paperwork you give them each month. But, you don’t have full control over the financial aspect of your business with that approach. Instead, consider using accounting software for your enterprise and do the bookkeeping work yourself.
Doing so helps you to learn about the health of your finances, plus it saves you money on accountant fees! Take a look at https://quickbooks.intuit.com/ for more information.
By following those startup money management strategies, you will have a tighter grip on your finances. Thanks for reading today’s blog post!
