Financial Essentials Every Business Needs
I know you're busy. Building a business means you’re juggling a million things—marketing, selling, signing new clients, and showing up to do what you do best. But here's the thing: neglecting your finances along the way is a big no-no. I get it, it’s easy to overlook, but we just can't afford to. Your life, your health, and your future self are counting on it. So let’s get into the financial essentials every business owner needs to thrive:
1. Consistent Pay Schedule
I know, it’s tempting to just pay yourself whenever you feel like there’s enough in the business account. But let me be real with you—this is how you end up living on a rollercoaster of highs and lows. Some months you're raking it in, and other months you're scraping by, and that kind of inconsistency makes it impossible to plan for your personal finances.
Set up a consistent pay schedule, even if it's a small amount. This way, you can get off that financial rollercoaster and start planning with confidence.
Pro-tip: If you’re making over $100k a year, consider switching to an S-corp. You’ll get a regular paycheck and distributions—best of both worlds!
2. A Business Savings Account
Let’s talk about something we all need: a buffer. A business savings account with two to three months’ worth of expenses is your safety net. It takes the pressure off having to hustle month after month just to make ends meet. And guess what? You don’t have to build it overnight! Set aside a little each month (even $200), and over time you’ll have a solid cushion. It’ll help you breathe easier when those slower months hit.
3. A Retirement Plan with Monthly Contributions
I know, retirement seems a long way off, but planning for it starts now. Waiting until the end of the year to throw a lump sum into a retirement account isn’t doing you any favors. You're basically gambling on one day of the year to be the best day to invest—and let’s face it, that’s risky.
Instead, set up monthly contributions to your retirement account. If you’re making over $100k and are the only employee, consider a Solo 401(k) or SEP IRA. Regular contributions spread the risk and help you save on taxes, while also setting you up for a comfortable future.
4. Accounting Software That Tracks Profitability
This might not sound glamorous, but there’s nothing sexier than a customized Profit & Loss (P&L) statement that shows you exactly what’s happening in your business. How much are you making each month? Where is your money going? Are you reinvesting smartly?
Get yourself set up with a tool like QuickBooks to track your income and expenses month after month. This is how you make sure your business is financially sustainable. Trust me, businesses that don’t have this kind of visibility often end up making poor money decisions—and that’s the fastest way to struggle or, worse, go under.
5. A Financially-Backed Business Strategy
Your business is here to support you and the life you want to live. So, let’s get real: what does that life look like? How much money do you need to make to build that life? Once you know that number, you can work backward to set goals for your business—whether it’s designing your sales strategy, pricing, or even planning when to hire.
Having a solid financial strategy means you’re not making decisions based on how you feel that day. It gives you a plan to follow, and that clarity keeps you moving toward your big-picture goals.
6. A Financial Partner (Hint: That’s Me!)
And last but not least, let’s face it—you don’t have to figure all of this out on your own. Having a financial consultant on your team who can guide you through these steps will not only take the pressure off but also give you peace of mind knowing you’re making the best choices for your business.
As a Certified Financial Planner, I help business owners set up systems like these every day. With me in your corner, you can be smart and strategic about your money, grow your business, and build the life you want. Sound like a good plan?
That’s it, girl! Get these financial essentials in place, and you’ll be on the path to a thriving, financially healthy business.