FIRST tips for entrepreneurs to manage Personal Finances

 Running your own business or seeing an idea turn into a successful venture sounds incredible. But, founding and running a business is not easy. It requires one to be laser-focused and demands a lot of time, effort and money. Having a handle on your finances is an essential part of running a business. But as an entrepreneur, your personal finances are different from your business. So, your personal finances require separate attention. You also need to factor in the ups and downs you may face in your entrepreneurial journey, which may stress your personal finances. As Suze Orman said - Hope is not a financial plan. It is unwise for anyone to leave personal finances to chance, but even more for entrepreneurs. Rather, you’ll be better placed when you plan meticulously.

Here are some ideas to be better prepared on the personal financial front so that you can continue to be the rockstar entrepreneur that you are.

Separate your personal and business finances

It’s crucial to make sure that your personal finances are separate from your business finances. If you don’t maintain this distinction, you might develop the tendency to dig into your personal reserves to run your company and end up compromising your personal financial situation. Some ways to ensure you keep them separate are:

• Pay yourself a salary.
• Do not use your personal investments or retirement funds to cover business losses.
• Maintain separate accounts, different credit cards and e-payment modes for yourself and your business.

Follow a strict budget

You may not have a regular stream of income from your business venture, at least until it takes off. Hence it is crucial to keep track of cash inflow and outflow.

• Develop a budget and stick to it.
• Be mindful of your income and expenses. Track your personal and business expenditures meticulously to avoid unnecessary spending from getting in the way of achieving your financial goals.

 

Entrepreneurship is a dream for many. But the path to having your own successful venture is an uphill climb. So, secure your personal finances before going full steam into fulfilling your entrepreneurial ambitions.