How you manage your money can either make or break you as a sole trader or small business.
Essentially, if you own a small business, as a sole trader it’s all up to you – there’s no nice, easy payslip from an employer.
So, what are some masterful money management tips to harness as a sole trader or small business owner?
Read more from Crest Accountants, your local Gold Coast Accountant to find out.
1. Identify and understand your financial position
Do you have a real grasp of your net position during the financial year?
Simply stated, you can’t learn and utilise money management tips without first knowing where you and your business stand, financially.
Bookkeeping and accounts can show assets and liabilities, but don’t help you if you don’t look at it.
Consulting on a regular basis with your Gold Coast Accountant can show you more, like:
- Scrutinising salaries,
- Delving into dividends,
- Superannuation contributions,
- Income options, and
- Stock management and purchasing.
2.Pay yourself first
No doubt if you’re a small business owner or sole trader, you’re busy worrying about paying employees, contractors, suppliers and worry less about you.
This money management tip is all about you!
- Get in the habit of taking a basic weekly or fortnightly wage,
- Make sure it covers your basic living costs,
- A steady cashflow helps alleviate financial concerns, especially if you have a family to support.
3.Business asset protection
As a sole trader and small business owner, don’t ignore the litigation risk you carry.
How can you protect your owned assets?
- By alleviating costs where possible, such as tax burden of purchase and installation of significant assets.
- Take advantage of the Instant Asset Write-Off which has helped many small business owners and sole traders before you, and recently been extended to assets up to $150,000, and
- Of course, consult with your Gold Coast Accountant to explore business asset protection services.
4.Create an emergency fund
Paying down debt like mortgages, business and personal loans is admirable, and one your Gold Coast Accountant encourages. However, there’s a twist with this strategy.
An offset account against your home loan or business loan avoids making additional capital repayments. This means you can quickly access a source of short-term and/or emergency fund rather than redraw.
5.Build wealth separate to your business
Economies, markets and trends change so quickly – so a plan B is always necessary, despite how wealthy you may think your business is.
How can you build wealth separate to your business?
- Regular superannuation contributions,
- Build equity, not debt.
- Establish a long-term business plan, and
- Consult with your Gold Coast Accountant in cashflow forecasting
- Planning for the long-term aids in building wealth and is a great money management tip.
Your Gold Coast Accountant and Business Accounting
Cafe owner to IT consultant, copywriter to independent grocery store owner, see how business accounting services along with these money management tips will help your small business flourish.
Need more money management tips? Contact Crest Accountants today for savvy small business and sole trader accounting services to keep you not only afloat, but thriving.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.