No matter what stage you’re at in your business, you need to have your financial game on point.
You need to know exactly what your personal expenses are. If you’re going to go for a business you need to know what your business expenses are going to be. Everything needs to be laid out in an easy to read spreadsheet. Even if you don’t like spreadsheets you can create a simple one by doing the following
Tabs across the top:
- Expense name
- Expense amount
- Date due
- How it’s paid (credit, checking, cash)
- Notes (why do you need it?)
Do this for both your monthly expenses as well as your yearly expenses. We all have those expenses that only come around once a year and we tend to forget to account for those. By adding a yearly expense section you will be able to clearly see those expenses.
Remember you want to always keep personal and business separate.
Once you know your expenses and what you need to make every month to afford your lifestyle, then you can start working on next steps. Next steps being, can you afford to do x,y,z? How are you going to make money in order to be able to afford what you want to do?
It all starts with knowing what you’re spending your money on and why you’re spending it. If you really don’t need it then get rid of it. Put that money toward something you actually want and need.
“Are you telling your money where to go or are you wondering where it goes? “– Chris Hogan
Once you know where your money is going then you can determine whether or not to move forward with your business. Once you move forward you can then start projecting how many items you have to sell in to make enough money to cover your expenses.
Looking for more financial tips? Check out Bank, credit card & accounting tips for small businesses
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