Being a successful woman entrepreneur also means being successful with our money management. Sadly 5 out of 10 Canadians say they would be in financial difficulty if their pay was delayed by even a week. Being self-employed or in business for yourself usually means a regular bi-weekly paycheque is not something we can count on, so we must be prepared.
Here are 8 money tips for entrepreneurs:
1. Know what you want in your personal goals and business goals. Write them down on paper and have a way of measuring them (using SMART principles). People who write down and have clear goals are far more successful in life than those who don’t.
2. Separate your personal & business finances. Have a business account and a personal account. The business account can be a regular type of chequing account – doesn’t need to have the words “Business Account” attached to it (unless you are incorporated). The important thing is that you are not combining your business and personal finances.
3. Pay yourself a salary. Determine how much you need from your business account each month to pay your bills. Transfer that same amount each month from the business account to your personal account. Don’t transfer a large amount when you get a big “paycheque”.
4. Understand your cash inflows and outflows. This is where people get into so much trouble. They spend more than they earn. Sorry, can’t do that! You have to use a spending and savings plan for your personal finances and an Income Statement/Cash flow projection with your business (you can get that from your accountant or book-keeper).
5. Keep track of your business revenue and expenses. Minimize your expenses – even if they are a “write off”. Understand the difference between revenue and profit.
6. Keep debt to a minimum in both your personal finances and in your business.
7. Taxes – you must set aside the taxes you owe for income earned! Remit tax installments and tax filings on time.
8. Plan for emergencies and the future. Start even with saving 1% and slowly increase that amount until it is around the accepted norm of 10%.
Hope these tips help you to be on top of your finances as an entrepreneur!