One of the first things in setting up a solid financial foundation is to determine for your business what you need to operate your business each month. Setting a budget for yourself helps you understand what you need to make each month in order for your business to continue forward.
There is a common saying that sometimes you need to spend money in order to make money.
While that maybe true, it is important for the longevity of your business to have a real understanding of what you can afford to put towards the business each month. As your business grows, your budget will continue to grow and the number of different projects you can pursue will continue to grow.
When your side hustle is still beginning to transition over to a full-time pursuit, you will likely be constrained on what you can do. Do not lose sight of those lofty goals and projects you have for your business. Just because you might not have those funds now, does not mean you will not in the future and then you can accomplish those original goals and projects that were out of reach before.
Every month we share current grants available to business owners in our monthly Wisdom & Wit newsletter. You can sign up to receive the free newsletter here.
Another aspect of the financial foundation is getting the right individuals in your corner to help you financially plan for your business. An accountant and financial planner can really help you and your business thrive.
An accountant is there to help provide guidance on paying your taxes as a business owner and also help you to take advantage of the various tax deductions that a business maybe entitled to during the year. Tax laws are changing and as a business owner you have a lot of other worries to be concerned with instead of trying to constantly follow the ever-changing rules and regulations implemented by the IRS. Having an accountant in your corner will provide you with that piece of mind so you can concentrate on other aspects of your business.
On the other hand, a financial planner can help to make sure you are set for once you decide to retire. Now that you own your own business, no one is helping to contribute to a 401k plan or IRA. It is your responsibility to help plan for your own retirement. A financial planner can help to make sure that you and your business have thoughtfully planned for the future by having retirement accounts available for you to use, the same if you were an employee of a different company.
A strong financial foundation of a business also includes being sure to enforce your rights against those who do not pay for the goods or services you have rendered. While there is room in business for being the nice guy, you as the business owner also need to protect your interest in the business.
The times in which you allow for others to get away from not paying for goods or services, can start to set a precedent and damage the financial stability of your business. Also, there is usually a set time limit in which you can pursue someone for nonpayment for goods or services. The longer you wait, the more difficult it become to enforce your rights against those who had not paid.
Part of this includes having impactful language in your contracts and having a procedure in place for pursuing those who do not pay.
These steps of key financial knowledge all business owners need can go a long way in helping to stabilize the financial foundation that you are trying to establish to help elevate your side hustle.
If you have questions regarding setting up your enforcement of your contracts or other aspects of your financial foundation, we can help! Set up a time to speak with one of us today. If you are looking for a financial partner, check out some of our amazing women power partners who stand by waiting to help you chart your financial course.