By Derek Goodman
You have big plans to launch a business, but something is holding you back. You’re nervous about committing to entrepreneurship because you’ve suffered from financial setbacks in the past, and you’re worried that you’ll encounter the same problems again. But by educating yourself on modern strategies for business growth through The Tesseract Academy, and following these tips for managing your finances, you can succeed despite your past financial mistakes.
Stay OrganizedPerhaps you have had trouble keeping track of your finances in the past, and your disorganization led to unpaid bills, late fees, or racking up overdraft charges. If you’re worried about staying on top of payroll for your employees, invest in reliable, user-friendly payroll software right away. You can even find payroll software that includes time tracking functionalities, which will make it easier for you to manage your team and access accurate employee timesheets. You can also look for software that integrates with other apps you already use and offers real-time reporting. In addition, payroll software with a corresponding mobile app enables you to handle payroll and flexible time tracking while on the go.
Budget AccuratelyMaybe you’ve had trouble properly budgeting your income from a full-time job in the past. Now, you’re concerned about budgeting on a fluctuating income and creating an accurate budget for your business. You may want to meet with an accountant for assistance with your business budget. And in order to manage your personal budget, plan your estimated spending around your monthly basic expenses and save extra in an emergency fund whenever possible.
What if you just don’t have the capital to launch your startup solely from your personal savings? You’ll need to acquire funding — you might want to look into crowdfunding or taking out a small business loan. However, before you set out to start raising funds, learning from other entrepreneurs can help you determine which methods you should try. For instance, you could attend an event like Tesseract Academy’s workshop “How to raise money for your start-up,” which takes place on July 1. Aspiring entrepreneurs will learn what types of funding they could seek and how to effectively raise funds.
Avoid Excess Debt
Yes, you may need to take out a small business loan to launch your company – but if you have struggled to get out of debt in the past, you might be worried about taking on more debt than you can realistically handle. In order to avoid excess debt, Headway Capital recommends keeping your cost of living low, maintaining separate personal and business bank accounts, and tracking your spending so that you don’t go over your budget.
Save for the Future
Finally, make sure that you leave room in your budget to save for your future retirement. As an entrepreneur, you need to be proactive about preparing for your own retirement, because you will not have employee retirement benefits. To ensure that you’re contributing enough to your retirement savings, Windgate Wealth recommends choosing the right plan: for instance, if you want to save up to 25 percent of your income for retirement, you’ll want to open a SEP IRA.
If you have been through financial setbacks before, it’s normal to feel a bit apprehensive about taking on the economic risks of entrepreneurship. Focusing on sustainable growth and smart personal finance choices is the best course of action. This will enable you to build up your savings while running a profitable business.
If you are interested in launching your own business, make sure to check out our program for supporting entrepreneurs.