Tired of taking orders? Be your own boss! Then you can fire yourself when you run out of money. But really, finances are a vital part of becoming a successful entrepreneur.
Aside from the motivation of working toward financial goals, entrepreneurship can make you a lot of money. The higher your income, the more money you have to spend and save. In addition, your product or service might be satisfying a need or solving a problem in your community.
Here’s a checklist that will help you get started:
- Estimate Start-Up Costs – Depending on the type of business, this includes everything from legal, machinery, equipment, inventory, overhead, and domain name, to web services.
- Learn About Licenses – Find out if you need one, and if so, what kind? Penalties for failing to register a business can be very costly.
- Set Up Separate Banking Accounts – It is important to set up separate checking and credit accounts to keep expenses organized. This will also prepare your business for filing taxes.
- Determine Operating Expenses – Estimate your monthly “burn rate.” How much are you spending each month on employees, bills, inventory, and other expenses? This will also help identify ways you can save money on expenditures by buying in bulk, changing suppliers, or altering your product to be more cost efficient. Keep track of who owes you money if you do business on credit, and make sure you are paid in a timely manner to keep your cash cycle flowing smoothly.
- Make Sure You’re Insured – Find out what kind of insurance your business needs in the short and long-term. This will depend on the type of business, if you have employees, and what your product or service.
- Keep Detailed Records – Keep track of not only income and expenses, but also correspondence, invoices, and all other records that you may need to access down the line.
- Remember Your Taxes – Consult with your accountant, and if you follow this checklist, you should be prepared well in advance! read more