Every financial decision has a financial consequence. As Dave Ramsey said, “You must gain control of your money or the lack of it will forever control you.” Good money management doesn’t happen by accident. Here are three basic components of a strong financial structure:
1) Business Bank Accounts: As Warren Buffet said, “Do not save what is left after spending, but spend what is left after saving.” So you should have two business bank accounts. All of your revenue and payments should be run through a checking account. And then you should have a savings account where you are storing up emergency money for lean times.
2) Accounting Software: Manual collection of finances would be a mess. Invest in affordable but high-quality accounting software to track invoices and payables, file taxes, and process payroll. If you plan to sell products online, make sure you spend time researching the right payment gateway. (Visit StartupCamp.com/finance for a free list of trusted tools.)
3) Pay Yourself Well: That doesn’t mean you need to write a fat check every month for you instead it means you should pay yourself as an employee of the company rather than taking dividends or draws. If you don’t build in your salary from the very beginning, you’ll end up creating a habit of spending and invest almost all your money in the business. And you’ll be broke by the end.
Once your business makes more money, hire a trusted low-cost bookkeeper for all your accounting needs. Just keep in mind one financial principle: debt is a company killer. As Benjamin Franklin said, “Beware of little expenses. A small leak will sink a great ship.”
Learn to make money, save money, and keep the money, and you’ll be free to enjoy your money for the rest of your life 🙂