With it being March and people thinking about that always-elusive pot of gold at the end of the rainbow, I thought we’d focus on finances this month.
That’s why I brought in my fun and influential friend Kelsa Dickey from Fiscal Fitness Phoenix for some
Money tips for new entrepreneurs.
Whether you’re launching a freelance consulting business, growing your online store or diving into the direct sales industry, working for yourself means that you are in charge of your finances now. You need to know what’s coming in and what’s going out, where you should save money and where you should invest and you have to file your taxes. Entrepreneurs have many unique challenges and opportunities.
Here’s what Kelsa and I talked about.
Tabitha: I work with a lot of women in transition from being employed to being a freelance consultant. Money is a major concern for them. What is your advice for their first steps as they branch out on their own?
Kelsa: First, know that you don’t need to spend a ton of money to grow your business and the most expensive item is not always the best. There are tons of ways to grow your business for little or no money. Try to add expenses gradually and slowly, or more in line with your income growing. If you don’t expect to see a huge jump in income, don’t make a huge jump in your expenses.
Second, create separation. Have a business account and a personal account. Try your best not to commingle or confuse these accounts. Determining exactly which account you should pay each of your expenses is one of the key challenge we overcome during the small business Eureka session so if this seems overwhelming, don’t worry, I’m here to help!
Finally, take a steady paycheck– that can be weekly, bi-weekly or even once each month but try not to spend money out of your business account for personal expenses randomly. Otherwise, your personal spending habits will impact the growth of your business, which is not a good plan!
Tabitha: Do entrepreneurs need a budget for their business? What do you recommend they do to keep track of income and expenses?
Kelsa: Everyone needs a budget! Budgeting is all about planning ahead with your money. It can be as simple as using pen & paper. What do you have in your account right now and what do you know is either coming in or going out in the coming few weeks? Tracking your income & expenses is very different! Depending on how complicated your business is, you may be able to use something free like mint.com. If your business is more complicated or if you have things like cost of goods sold, various cost centers, etc, you may want to look into Quickbooks or even the cost of hiring a bookkeeper to do this for you.
Tabitha: A lot of money is wasted when we’re disorganized. What are some tips for entrepreneurs on how to keep their finances organized?
Kelsa: Keeping your business income & expenses streamlined and all flowing through one checking account and maybe just one credit card will help significantly. The more places you have money flowing, the more chaotic it is! Second, keep a super simple filing system. The idea is IF you’re audited can you find a receipt? As long as you can do that, you don’t need to over think the system or over complicate things. If it’s not simple, most of us won’t stick with it. Simplicity is key!
Stay tuned for part 2 to continue the conversation about where entrepreneurs waste money and how you can MAKE more money! You’ll also find out whether it’s time for you to hire an assistant.
Now go visit Kelsa and tell her Tabitha sent you!
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