A lot of small businesses are Sole Traders, or Partnerships, and as such the finances, resources, and management can get intertwined with your personal finances and life.
Ensuring your personal finances are under control will filter into ensuring your businesses finances are under control.
Follow these 6 easy steps to get your personal finances under control, so you are not dipping into business money or worse contributing to your business unnecessarily.
Then ensure your small business finances are under control with 6 similar easy steps.
These steps are a framework to build a good system for keeping your personal finances under control. A full program, including worksheets and consultations, is available.
6 Steps to Financial Control – Personal
1a. Review your current financial situation / create the skeleton of your attack plan – How much money do you earn / owe / have saved?
1b. Budget Planner – List ALL actual incomes & expenses on a personal Budget Planner. Write down exactly what you need to pay out every week/month on all loans, credit cards, rent, mortgage, food, fuel, electricity, school fees, insurances….
2. Bank Account Separation
This is the most important step. Your personal accounts MUST BE separate from your business accounts – bank accounts, credit cards – everything
3. Automatic Payments
Establish automatic payments to and from each account to ensure bills & commitments are paid.
4. Reduce your Debts
After identifying all your debts, and setting up payments, what debts can you eliminate, reduce or combine?
5. Increase Income
If your commitments are more than your income, and you have reduced your debt, can you increase your income?
6. Celebrate & review
It is important that you celebrate your control. In the above steps you will always have a ‘spending’ account where you can spend every last dollar, without guilt. If you have manged your commitments then there will be no more ‘chasing your tail’ to find money for bills or repayments.