These budget strategies reduce stress and surprises.
4 min read
The opinions expressed by employees are personal.
Running a business by yourself, no matter how exciting, is not easy. Learning to manage expenses can be a nebulous thing to learn, as well as deciphering when to pay you (and how much), and planning for when you don't know how much money you are going to be generating. And you are not the only one, that in 2018, 61% of small businesses did not have a documented budget.
As we are starting a new year, and we are a new version of ourselves, I give you the power to control your budgets, commercial and personal, this year with the following tips to not feel fail. If you know how much money comes in and how much goes out, you will feel more secure, and you can plan for the rest of the year, surprises included.
1. Create an “emergency fund”
The standard solopreneur has a checking account, a savings account and maybe some money invested in other means, but there is a fund that can facilitate large expenses: the emergency fund. Ashley Feinstein Gertsley, financial coach and founder of Fiscal Femme defines it as a fund that will eventually “run out” or be spent. This is money that you separate for things like a midyear hiring or a ticket for that conference that you can't miss.
“Decide how much and when to separate that money. If we have an idea of how much something will cost, we can start from there. ” This fund is completely in your hands, and it's up to you how much to save, how often to do it and when to spend it. But this makes big expenses much easier to plan, and you'll feel more in control when you have to spend it.
2. To the extent possible, create a subscription plan or something that retains your customers
Depending on the type of your business, it may make sense to create offers so that your customers can hire you on a recurring basis or with a subscription to your service. This is particularly important when you cannot predict how many customers, transactions or deals you are going to close in the month. This uncertainty is the cause of much anxiety and stress.
Double Your Freelancing for recurring clients, such as monthly consulting calls, a special newsletter or virtual training. In this way, it makes more sense to be hired on a recurring basis with the full package, rather than just wanting to hire you when they need you.
3. Create a bulletproof method to keep track of your expenses
Do not make the mistake of thinking that you will remember all your expenses at the end of the year. Better, look for simple ways to keep track of everything that is spent on the business. I use an app in which I can easily put my expenses and income (as well as photos of receipts or invoices) to know where I am at all times. There are many programs that can help you do this.
Several of my friends have a special photo album for receipts, and write a note to find out what each expense was. Having all this documented and organized will help you stress less when doing accounting.
4. Hire an accountant that you like
We shouldn't need to say that you should have an accountant, but I recommend you find one that you really like. I was lucky to find one that solves all my doubts at any time of the year. There is no doubt that the issue of taxes and declarations is complicated, so having someone by your side, someone to help you feel calm and comfortable, is essential.
If you do not have a good relationship with your accountant, ask to be recommended to someone. I found my accountant because someone recommended it to me. Ask in Facebook groups or among your friends.
Learning to budget will be something that comes and goes throughout your life, but these practices will serve you indefinitely.