Whether you got tired of being ordered around by your boss or you saw a gap in the market and decided to fulfil it, there are many reasons why people choose to start their own businesses.
I mean, with all the benefits it comes with who would not grab an opportunity to be self-employed?
However, this does not mean that you will be plucking money off a tree. It comes with its own set of unique challenges which cuts across the board whether you are solo or have tens of people under you.
To help you build your business you must invest in financial planning. Why this is important, especially for you as self-employed, is because you have no one else to fall on.
You must create a financial cushion when clients pay late, unexpected costs pop up out of nowhere or when the business is undergoing a slump or it has taken longer to pick than you had anticipated.
With a few financial tips, here is how you can pull through.
i.Create a financial plan
With the help of a financial adviser or on your own, create a financial plan. Think of this as your business road map. Have a comprehensive guide that gives you an overview of your current financial situation, short and long-term goals and strategies on how to achieve those goals.
This will give you direction and allow you to make the necessary adjustments when need be. Making the assumption that everything will somehow work out is a big mistake you want to avoid.
How will you know what to accomplish without writing it down clearly?
ii.Hire an accountant
This may sound like an unnecessary expense but trust me they will save you a lot of stress and time. Unless you are a CPA, you have no business doing accounting so leave it to the experts to help your business.
They will help with the taxes, offer you the best business advice considering their vast experience having worked with several companies and handle all financial related work.
This in turn gives you time to focus on what is important to run your business.
iii.Taxes
Many small businesses fail at keeping tabs when it comes to taxes and that is why an accountant comes in handy.
To avoid bad surprises, periodically review your taxes and keep abreast with any new tax laws that may affect your business.
Have a business plan that will show how much you need to pay and when. This will allow you to keep some money aside for that purpose.
iv.Reduce debt
Debt will slow down your dream for financial freedom. Whatever the kind of debt your business is in, make a priority to clear them ASAP.
You should also look into the interest rates on your loans which may be draining your savings and profits thus hampering your financial objectives.
Before taking up any money, it is always a good idea to consult. Borrowing is one of the fastest ways to lead to financial trouble. Do it wisely.
v.Insurance
As with most self-employed businesses, you are practically the business. When you fall sick and miss a few days of work chances are, everything comes to a halt, your finances take a massive hit and your savings start to deplete.
That is why it is crucial to invest in a proper insurance policy. In the event of illness or income loss, you will be compensated depending on your cover and terms.
This way your business will be able to stay afloat as you get back on your feet without eating into your finances.