There’s a steep learning curve involved with starting your own business. You probably never imagined there would be this many tiny details to handle and new skills to learn. You just have to dive in at the deep end and pick things up quickly. One of the hardest, and most important, things to get your head around is small business finances.
It’s way more complicated than handling your own money but it’s absolutely crucial that you get it right. If you make mistakes with your accounts you can easily find yourself in a lot of trouble. The obvious thing to do is hire an accountant, but that’s pretty expensive and when you’re just starting out, you probably don’t have that much spare cash. The good news is, it’s possible to handle the accounts yourself, but it will be hard. Here are some great tips to help you handle your small business finances without making any blunders.
SEPARATE BUSINESS & PERSONAL FINANCES
There are a lot of risks involved with starting any new business and, chances are, you’ve already put a lot of your own money into the company. But you’ve got to be very careful because if you put all of your savings into the business and it ends up failing, you’re going to struggle. That’s why you need to separate your business and personal finances and make sure you’ve got something set aside for the future.
CUT SPENDING AT HOME
Unless you’re incredibly lucky, you won’t start making a profit for quite a while. That means you won’t be able to pay yourself much of a salary just yet. If your spending at home is out of control, you’ll have to pay yourself more, which means you’ve got less to put back into the business. That’s why it’s important to get your spending under control at home. You might have to live on a tight budget for a bit but once the company gets going, you’ll be able to start paying yourself more.
LEARN THE BASICS
You don’t need to be an expert accountant to handle your business finances but you do need to learn the basics. There are some great home study courses by Avado Learning that are aimed at beginners. It’ll teach you everything you need to know to run your accounts properly and you’ll get a qualification out of it at the end.
USE ACCOUNTING SOFTWARE
Once you’ve learned the basics of accounting, you should be set to handle your finances without making too many mistakes. But if you start growing and taking on a few staff members, it can be difficult to keep track of all of your spending and sort out payslips etc. That’s where accounting software comes in. There are some great programs out there that can do a lot of the day to day accounting jobs for you. It’ll give you more free time to focus on other areas of the business and you won’t be likely to make as many errors.
Handling your own business accounts is daunting, but as long as you spend wisely, learn the basics and use good accounting software to help you out, you should be fine.