Starting a business means freedom, a chance to develop your niche, and having more control over the money you earn. With this freedom comes the obligation to deal with budgeting issues without the luxury of an accounting department.

Here are five useful tips that can help any entrepreneur or solopreneur manage their budget and make it work effectively.

1. Encourage Subscriptions or Retainers

It can be tough not knowing whether that star client from last month is going to propose another project this month. This uncertainty can put a strain on budgetary planning. Reduce this uncertainty by encouraging your clients to subscribe to your services or put them on a retainer. That way, you will have a clearer idea of how much money you will earn.

Incentivize subscriptions or retainers by offering discounts to clients who opt for this method or giving bonuses like eBooks, free webinars, and discounts for services provided by partners. Many consumers are more interested in a subscription if it carries a discount or offers something of value.

2. Separate Business and Personal Expenses

One way to avoid a budgetary mess is to separate business and personal expenses. This will make tax time much easier and will eliminate the need to search for papers or documents at the last minute. Have an account strictly for business purposes and use a business credit card for professional expenses only to keep things neat and orderly all year round and especially at tax time.

3. Keep an Extra Fund for Large Expenses

Many opportunities only come along once. It is important to have the funds available to take advantage of these opportunities, especially if they are potentially game-changing for your business. It could be a conference where you can drum up more clients and raise brand awareness or software that will improve communication with your clients. Putting a little money aside regularly for this fund will ensure you can make the investment when it comes along.

4. Automate Your Budgeting Tasks

If you are still figuring out your budget and expenses with a pencil and paper, it’s time to get automated. Entering income and expenses into a software accounting program on a daily basis will make budgeting easier and will provide metrics that will help you monitor your business’ growth daily. Getting rid of those notebooks and slips of paper will also make your bookkeeping more efficient.

5. Schedule a Monthly Budgeting Review

Every month schedule a time for a full review of your budget. If you have followed the steps above to automate and calculate your expenses and revenue as you go, these reviews will be as easy as looking at what you have earned, what you have spent and deciding what areas of your business can be run more efficiently and with fewer expenses. Being pre-emptive and solving issues before they arise is much easier than solving problems later on.

Taking charge of your budget is one of the main elements of entrepreneur or solopreneur success. Automating tasks, keeping personal and business expenses separate, and taking stock of your business finances every month can make your business more productive and successful.

Are You Making Some Common Money Mistakes? Join my next Livestream Training…

Now that you’ve got your business budget under control, what other money mistakes might you be making? That’s the topic of my next livestream training on [DATE/TIME]. Very often we fall into bad money patterns or habits and we don’t realize we’re making serious mistakes because this is how we’ve always handled money. Join me to investigate if your money mistakes are holding you back from the profits you deserve! [LINK]

Why You Need a Financial Checkup Every Year

You probably get a physical check-up every year. As a solopreneur, you need to put your business finances through the same constructive scrutiny. Ideally, you will examine the financial direction of your company at several points during the year, but an annual in-depth checkup is necessary to keep your business fit and healthy. Here are some reasons and considerations for this financial checkup.

• Is Your Revenue Model Working?

One reason it is important to perform a financial inventory on your business is to ensure your revenue model is productive. Are you getting revenue mainly from a few clients? How do you get revenue from clients who are not as active? Should you develop new revenue streams, such as selling new products, hosting paid webinars, or starting a membership club based on a subscription model?

Think about your revenue goals and compare them to expenses. Keep in mind that if your expenses are high, you will need to earn more revenue to cover these expenses and still make a profit. That is why revenue analysis and looking at expenses are two steps in the same process.

• Can You Eliminate Expenses?

You may be surprised when performing your annual financial check-up to realize that you are spending more than you need on unnecessary expenses. Discovering this and cutting down on these expenses is like giving yourself a present or a bonus.

Having clear expectations of expenses throughout the year is important. Otherwise, you could be tempted mentally to inflate your profits based on revenues without taking expenses into the equation. Thinking carefully about what you need and getting rid of expenses by automating tasks and eliminating subscriptions you don’t use can maximize your profits.

• Are You Making the Most of Tax Savings Opportunities?

This is where having a really good accountant can be helpful. Unless you are a tax whiz, you may be missing some valuable tax benefits. Have a yearly review with your accountant and explore ways you can save on taxes, from claiming new business expenses to setting up a retirement fund that provides tax benefits.

In addition, regulations for tax breaks for small businesses are often passed without most people realizing it. An astute accountant is informed of these changes and can help you save an unexpected amount on your annual taxes.

• What Are Your Financial Goals for the Year?

It is important not only to have goals in mind but to write them down and review them periodically. Check off those targets you have reached and set new ones. Raise the bar but keep your expectations reasonable. Create long-term goals you can achieve and check off in a year and short-term goals per week, month, and quarterly. These goals can be connected to revenues, profits, cutting expenses, several clients, developing new products or expanding your brand’s social media presence.

• A Clean Bill of Financial Health

The more conscious you are of your businesses’ financial health, the more successful you can be as a solopreneur. Taking stock now and again, giving your revenue and expenses a thorough examination, and setting goals at least every year is essential for a healthy business.

Are Money Mistakes Costing You Revenue?

I’ve discovered that there are 4 common money mistakes that can halt a solopreneur in their tracks. They can work 80-hour weeks but seem to never make enough money in their business. If you fall into this category, join my next livestream training, and see if you’re making any of these money mistakes. You might be surprised but once you’re aware, you can make some changes and put yourself on a better financial plane. 

To hear more about this topic and others from Crystal Davis, go to https://pod.co/lead-lean