If financial literacy is a top resolution, and it’s looking like it might go the way of last year’s unused gym membership, get in on the action to finally make it a reality. These are smart ways to organize your small-business finances in 2011.
Prioritizing your finances is the same as prioritizing business growth. Your business and personal finances can be separated from an accounting system and bank account. This may be your most important goal!
5 Methods to organize your business
There are 5 Methods to organize your small-business finances:
1. You can open a business bank account and get the most out of it
These days, there is no one-size fits all approach to business banking. Small business owners can choose from traditional, local, or online banks that offer a variety of services and add-ons.
This guide will help determine what is most important to you, and then choose the bank that best meets your needs.
2. Invest in Accounting and Bookkeeping Tools
Did you know that the majority of small businesses do their accounting in-house? Are you one of these small businesses? These are the top tools to help you manage your finances for the coming year:
For bookkeeping needs:
- QuickBooks Live Bookkeeping
- QuickBooks Online
3. Create a business budget, especially if you’re brand new
We know. We know. Even a simple budget can seem daunting. Accounting platforms like Freshbooks and QuickBooks Online integrate forecasting and budgeting tools. However, it can be difficult for early-stage companies without sales data.
If you are just beginning, our guide will help you to make it easier. It will also tell you where estimates can be found to add to your forecast.
- SBA’s Startup Cost Estimator Tool
- Trusted online publications that relate to your industry, niche, or size
- Branch-related associations and member organizations
- Mentors and contacts within your network
Let’s get started!
4. Find out the cost of taking an owner’s draw
Solopreneurs can get paid by taking an owner’s drawing. It’s as easy as writing a check from your business account. But wait!
Before you make any changes, be sure to read these terms and conditions.
- You cannot take as much money as you like. The owner can only draw the amount of your equity.
- Taxes don’t automatically get taken out. Self-reporting your draws will require you to pay federal, state, and local income taxes and possibly quarterly taxes.
5. Pay your bills no matter what
A business typically turns a profit in two years. So how can you pay your bills and business expenses if there is no income?
These are some creative ways to keep your lights on.
- To guarantee a steady stream of income, treat your business as a side hustle.
- Bootstrap (relying on savings or sweat equity).
- Ask for micro-loans from family and friends
- Crowdfunding platforms such as Kickstarter, IndieGoGo, and GoFundMe allow you to crowdfund.
Learn more about how to pay your bills with our Determine How To Pay For Yourself guide.