To be successful in business, your personal finances and personal relationships have to be very strong – otherwise the business will not survive.
Those words are a very common theme I hear on a regular basis from people that have been involved in the business and franchise community, and have been successful in their game over the long term.
People who buy a business have usually left an employed position to get in to business and usually have very limited knowledge of how to run a business.
Big mistake is that when they start making some money in the business, they start drawing down money to fund lifestyle.
This is where I come in and work with them on the importance of having your personal finances as efficient as possible, particularly in the early days, and the direct correlation that has to them having a successful and profitable business.
I speak to business owners about their personal finances but the information can be very easily interchanged to refer to business finances.
10 Ways To Generate Strong Finances
• Have a very clear picture of what it costs you to live and what your personal expenses are.
• Look at tracking your spending to build an awareness around what is going out versus what is coming in.
• Gain a very clear understanding that your savings/cash reserves must last until business income can replace that.
• Determine what wage you want to draw from the business and calculate what income (on top of business expenses) that you need to generate.
• Keep business and personal accounts/spending as separate as possible
• Make allowances for future expenses that need to be paid – BAS, tax and royalties.
• Build an awareness around what you need to earn to cover your business expenses each month.
• What amount do you need to factor in to invest back into your business – marketing and advertising?
• Importance of establishing a relationship with an Accountant and/or Bookkeeper.
• Maximise all potential business concessions – some personal expenses may now be tax deductible.
If you would like to talk more about your own personal situation contact me.