Talking about finance for entrepreneurs forces us to immerse ourselves in a field that surely seems very unattractive to you.
Most of the entrepreneurs focus on having a website, designing a marketing strategy, creating infoproducts, launching autoresponders … And they forget the most important things!
If you want your business to stay healthy now and in the future, it is essential that you have a good control of what happens with the economic part.
And since we want to help you get it, today we share with you 10 finance tips for entrepreneurs.
You will not become a broker, but you will lay the foundations to optimize your profitability and know what really happens in your business.
Because accounts are accounts … and the rest are stories.
one. Separate the personal finances of the professionals
For convenience, it is possible that the expenses and income of your business are associated with your personal bank account and you have everything mixed.
One thing is the expenses that you generate in your personal life and other things related to your business.
Therefore, the first financial advice for entrepreneurs is to keep them separate if you want to be a successful entrepreneur.
Juanmi and I have an account in the ING bank for everything related to the business, and another common account in EVO bank that is the one we use for the day-to-day personal expenses.
two. Get a salary
Since you are in charge of a sole proprietorship business and it is also yours, the safest thing is that you have not assigned a monthly salary.
If you need money, take it out and that’s it. Sometimes you take more and others less.
Your business is a company and so you must understand it and live it. Therefore, one of the first steps you have to take if you do not do it yet is to define a fixed monthly salary.
That will be the amount that corresponds to you and you will not be able to touch a penny more.
3. Check the accounts every month
How do you intend to improve the profitability of your business if you do not measure what happens in it?
Just as to improve your productivity you measure the time you dedicate to each task, to optimize the accounts you have to review and track them periodically.
If you now have a document of your expenses and income half abandoned (and which you look at once every 3 months because you have to render accounts to the Treasury, if not, not even that) you have to create the habit of reviewing them.
To do this, block in your agenda at least one hour per month (the day you prefer) and during those 60 minutes put in order the movements that have occurred in the previous 30 days.
This practice is useful for controlling finances and will also help you detect possible errors in vendor collections (some wrong telephone bill, a commission that you do not know where it comes from …).
To make things easier for you, you have tools such as Fintonic, an application that connects to your accounts and with which, in addition to receiving notifications if something strange or important occurs (such as a duplicate charge), you can check and keep track of how it works. the money goes in every moment.
4. Form yourself in finance for entrepreneurs
Nobody is born knowing and being an entrepreneur does not make you an expert in finance.
As Sergio Fernandez says: “Any area of your life in which you are not succeeding is because you have denied knowledge.”
Therefore, to cover your administrative gaps, it’s time to train! Read blogs and books about finances.
The more you know about it, the better you will organize your information and control what happens with your accounts.
Another option is to support you in a finance coach for entrepreneurs that will guide you and help you to master the administration of your project.
5. Set specific quarterly targets
Defining the destination is essential to know which road you should take.
The same thing happens in a business.
Therefore, it is advisable that you set economic goals, whether you have already spent time with your business or if you have just started your project and are a novice entrepreneur.
As the months go by, you’ll know if you’re getting closer to your goal or you should take some action to redirect your business in the right direction.
By the way, be realistic. Think attainable goals and progress little by little and step by step.
6 Diversify and invest
Investing in yourself and your business is important, of course, but playing one card can be risky.
Therefore, it is best to diversify your income entry. For example, if you sell a main service, you could offer a secondary service and create an infoproduct. From one, you would have 3 possible income channels.
In addition, it always invests part of the benefits.
Even if you believe that money is the end and that the more you keep, the better for you, your business and your future, this is a half truth.
To improve and grow (as a professional and as a business), you need to invest.
Remember that money is not the end. Money is the means that will allow you to reach the end. 😉
7 Automate and use tools that make things easier
Automate everything you can.
For example, online transfers, billing or payments to your accounts every month.
As well as the publications of your social networks and the sales funnels, you can also automate many aspects related to finance.
Prepare invoices, make budgets, apply taxes, point out the profit margin … All these tasks related to finance are repetitive, heavy and consume precious time.
We live in the era of technology and you have at your fingertips specialized tools in management and finance management for entrepreneurs in which you can support and who take care of all this for you.
And there is one without which we could no longer live:
It is an application that allows you to simplify your accounting to the maximum because it handles billing automatically.
Among other things, this is what you can do:
Bill anywhere in the world in different languages and currencies.
Apply taxes automatically.
Access the most important metrics of your finances to make business decisions with updated and real data.
Automatically connect with payment platforms such as PayPal and Stripe, which means that if you sell a course or digital infoproduct, the invoice will be created automatically.
If you are an entrepreneur and you sell (or want to sell) infoproduct, Quaderno is the application you need.
We also have a gift for you for being a follower of More and Better. To discover it click on the following link 😉
8 Set budgets
Most entrepreneurs make investments and purchases at the stroke of improvisation. The result is that imbalances constantly occur.
Investing is fine, but you have to do it responsibly so as not to suffocate your business.
As you can imagine, a healthy business does not hold onto the tightrope for a long time.
When you set a monthly budget, you know in advance what your spending limit is and you do not get surprises from the bad.
If a month you see a course or a tool that would suit you very well, but exceeds the budget you have set, wait for another month to do with it.
Or … if it is an important investment because it will improve the internal processes of your work, you can use your contingency cushion to avoid spending more than what you enter.
A mattress? Yes, it is the next finance advice for entrepreneurs.
9. Have a contingency cushion
When you start, it is normal to have months with peaks of work and others somewhat looser.
How do you cope with lean periods without a financial cushion?
And what happens if a month, for whatever reason, you can not work and you do not have a team in which to delegate tasks?
And if you go on vacation? (Because entrepreneurs can also take vacations) 😉
And if you have to face an expense that you did not count on, which is also important and urgent?
You keep the water around your neck.
To allocate a quantity of money every month to feed a mattress of contingencies will allow you to have mental and emotional tranquility, to face unexpected expenses and to avoid that every three times your bank account remains shivering.
Therefore, the ideal is that you have a mattress with which you cover your fixed expenses between 6 and 12 months. In addition to providing peace of mind, you can make better business decisions.
If you want to know more about achieving true financial freedom, making the most of your savings and planning your ideal future, I recommend this free pre-savings and financial freedom course.
10. Delegate in an agency
Do not fall for the superhero syndrome and pretend to do it all.
It is important that you hire the services of a professional manager who handles paperwork, presentation of taxes before the Treasury, declarations and other financial entertainments.
This way you can dedicate yourself to what you really are good at.
In addition, you will have a support and a direct source to solve any doubts that may arise.