Budget Better for Your Business and get Ready to Work

19-Ready-to-Work Mind on Your Money

19-Ready-to-Work Mind on Your Money

Money and time may be neck in neck for the two biggest hot button issues for most entrepreneurs (and…well just about everybody!)   Last week, in the first part of this three part blog series, Ready to Work, we tackled time management through prioritization in Declutter Your Mind. This week as promised, I’m talking budget.

Whether you’re cutting back your hours to make space for a new business, quitting your day job altogether or learning to juggle responsibilities as a sidepreneur, making the most of your money is so important. Considering that most people list financial freedom as one of their top reasons for wanting to own their own business, it’s especially important to build a strong budget plan from the beginning.

Today I’m offering you THREE key areas where you can create the most breathing room; the umbrella points under which I believe almost everything falls. After each, I’ll suggest some questions to ask yourself and provide some actual tools, tips and resources that can help support financial health in each area.

You ready to cash in on some budgeting gold? (See what I did there?) Ok, here we go…

 

#1 Key to a Blooming Budget: Plan on it!

Often the biggest mistake people make with their personal budgets is not having a plan. This means planning for everything from buying dog food and your morning blond espresso from Starbucks to that big anniversary trip to Belize, the bikini you want to wear there and the 6-week kickboxing boot-camp you think you need to take first.

When you buy the groceries without a list, you end up with $250 worth of stuff like dragonfruit and imported capers and leave the store forgetting the staples like eggs and milk. And when you don’t put money away for Belize ahead of time, you can end up paying it off on your credit card for years to come.

In business, planning for every financial detail is just as important, maybe more so. Because just like you need to build your endurance to weather the emotional dips, having a solid financial plan will help you brace for unforeseen expenses, inconsistent ebbs and flows of income, and the unplanned opportunities that you’ll wish you had the funds to take advantage of.

Here are some questions to ask yourself in order to create a solid plan:

Do I have a dedicated business account to operate from? You’ll want to make sure that you set up a business account with at least a business debit card, so that you can keep business and personal expenses separate. A number of things can be written off or act as tax credits, so it’s important to have a separate account to use for business expenses, and keep all of your receipts, and statements for safekeeping. If you’re not sure which things you can deduct, talk to a tax preparer.

Should I pay a professional to prepare my taxes? This is one of those things that it makes sense to invest in if you don’t really know what you’re doing. While you can do your business taxes yourself, a professional tax preparer can help you get the most back in your refund and give you advice about which business structure to set up for your business. I recommend talking to a tax advisor or tax attorney rather than just taking the advice of other entrepreneur peers, as a professional in that specific field can give you the most informed and accurate legal advice about the right structure for you.

Should I purchase business insurance? This is something a lot of new business owners overlook. While it’s true you may rarely need to utilize insurance, often depending on your type of business, the monthly cost is low enough that the cost of having it far outweighs the potential risk you may run into if something unforeseen occurs.

But planning is not just about deciding what you have to spend on a particular area and making sure you keep track of everything. It’s also about being thoughtful about the things you have in place, so that you’re not rocked by the unexpected.

Other ways to proactively save your pennies:

  • Have a clear Terms and Conditions (TOC) page and Client Contract (if applicable). Having these two things in place may save you from needing to use insurance. Again, it’s an area that merits a small initial investment to have a professional draft a TOC page for your website and a service contract to use with clients.
  • Maintain good file management and storage. One takeaway from my time studying web design, was keeping a good file management system (I may write a whole post about it sometime!) Keeping your files in good order and making sure you’re maintaining a consistent back-up schedule is essential to not losing important information you have to spend money or time to replace in the future. I highly recommend using at least one form of cloud storage in addition to using an external hard drive.
  • Password security. It may seem like everyone’s harping on this these days, but using strong passwords and choosing different ones for each program or service you use, is a really smart habit. Again, this is one of those preventative measures that seems inconvenient until the worst-case scenario happens. I recommend using both a password manager like Dashlane or 1Password as well as enabling two-factor authentication (typically meaning requiring both a password and a second piece of identification like a fingerprint, or SMS code) whenever possible.
  • Create a business reserve savings account for yourself. Put aside money each month, even if it’s just $10 or $20 to start with in order to save for new software, programs, systems, training or tools that you will want to invest in in the future.

The bottom like is that running a financially stable business is about the long game, not just the short term. Sometimes having good savings habits in place, creating good business practices and enlisting the advice of experts in the beginning, can save you significantly in the long run.

19-Ready-to-Work Mind on Your Money

19-Ready-to-Work Mind on Your Money

#2 Key to a Blooming Budget: Be savings savvy. 

I’m not an extreme couponer, but those folks have something to teach us all: finding ways to cut corners on regularly priced items takes more time, but sometimes can give you a lot of room in your budget. The same goes for business. When you’re starting out there are a lot of ways to be thrifty and frugal.

Here are my biggest savings strategies when you’re starting out:

Look for free and Lite Versions. Look, the fact is, most free or lite versions of apps and software are either 1) only free or reduced in price for a limited time, or 2) trying to get you interested enough to want to invest in the more robust version. The benefit however is that when you’re just getting started, you’re not going to know right away what works best for you. Using the free or low cost version of a product is a great way to save money and decide if something is even worth the investment for you.

Below are areas where it might make sense to start “lite”:

  • Scheduling apps such as Calendly (which I use and recommend!)
  • Client/task management platforms like Asana, Dubsado and Trello. I especially love Trello because (at the time of this blog post) you have the ability to create unlimited boards, integrate it with your calendar (and other apps), share content and sync it with your phone all in the free version.
  • Get free/inexpensive education through sites like Treehouse, edX, Coursera, Open Culture, Udemy, Lynda.com.
  • Email service providers. Currently Mail Chimp offers one of the most robust free versions available. It may not be sufficient as you grow, but it’s a great place to get started with email marketing.
  • Graphic creation and other media services…in fact I’ll expand on this under it’s own heading…

Save Money on Media. I’m giving this it’s own heading because there’s so many things that new business owners need graphics, video and other types of media for. Below is my list of my favorite resources for creating professional looking graphics, documents and video without paying for expensive software or graphic designers: 

  • Canva.  It’s that much better if you have even a limited knowledge of web design, but totally unnecessary because it’s very easy to use. There are a few minor glitches, but they’re easy to work around and for me, the paid version at $12.95 is worth the additional features: folders, saving brand colors and fonts and the ability to create templates.
  • If you are an Apple user, some great native Mac/iPhone apps are Photobooth (for both photos and video), iMovie (for video editing), and Voice Memos.
  • Zoom.  A video conferencing program that offers a fairly robust free version for one-on-one conferencing and allows larger group conferences that are free if under 45 minutes.
  • Creative Market. This site is a great resource for stock photos, social media backgrounds, Power Point slides, font options and so much more. The site is free to browse, and there are some freebies periodically. My favorite thing though is that every month they offer a HUGE bundle of assorted media for under $40…sometimes it’s worth the cost, sometimes not, but it’s definitely worth checking out what’s offered in each month’s bundle.
  • Google’s suite – Drive, Forms, Docs. Lots of great options for creating professional looking documents and forms you can easily share…fo’ free. Can’t beat it!
  • Free stock images – Morguefile (a free image sharing site, with a slightly creepy but harmless name) and you can also get images (and create graphics) through both the Word Swag and Photofy apps.

Share, Thrift or Wait. So I’ll just lump these three under one heading, but they’re all other creative ways of keeping your budget under control. Here are some good questions to ask yourself that fall in one of these areas:

  • Do you know another business owner who would be willing or interested in sharing the cost of something or bartering with you? Think about what things you could split with someone else. Maybe that’s a shared workspace, office supplies/work materials or books and other resources. You may also consider things you can offer someone in trade for a service or product they offer that you need.
  • Is there something I need that I can purchase second hand until I have the money or need to invest in an upgrade? Often when we’re at the beginning of starting a business, we feel like we need to run out and get the newest and best version of something, and occasionally that might be warranted, but whenever it’s not truly necessary, consider cutting expenses by investing in an older version.
  • What do I need right now to run my business effectively? If it’s something you truly need today, then it’s likely worth the investment. However in buying new office equipment, the best devices, premium business cards and pricey computer programs, often the allure of having something new and having it now, overshadows the reality that we don’t actually need it right away.

When it comes to running your own business, it may feel like using discounted products or shopping second hand lessens your legitimacy, but it’s all in your presentation…and your mindset. Remember that being cost conscious is something that no one has to be aware of and you can still focus on the quality of the goods you create and the message you craft without spending top dollar. And the added benefit is that you’ll have built a business with financial integrity that’s an excellent model for those you’re serving.

19-Ready-to-Work Mind on Your Money

19-Ready-to-Work Mind on Your Money

#3 Key to a Blooming Budget: Don’t sell yourself short!

I’m not going to give you advice in this post on how to price your goods or services, but a good rule of thumb is not to spend excessive time stressing over your price point. The truth is, regardless of how cheap your offerings are or how expensive they are, someone is going to think it’s still too expensive, while someone else might actually be put off if it’s really inexpensive, and wonder if the quality is truly there.

Spend more time on making sure the quality IS in the product than you do on agonizing over how much to sell it for. Additionally, once you have arrived at a price point, don’t let people take advantage of what you can offer.

Here are some ways to avoid selling yourself short:

Resist the urge or pressure to give away your goods or services free (or at a steal) to friends and family. This is a huge pitfall of business owners. When people know you offer a service and have a personal relationship with you they may assume this means you can help them at no or very low cost. Whether you’re a caterer, photographer, hair stylist, health instructor, web designer, make-up artist etc., don’t feel obligated to offer your time (which is your most valuable asset) at a significant markdown to anyone.  When and if you choose to do so, do it from the heart and make it a carefully measured decision.  You’re not a bad person, or a bad friend, for wanting (and needing) to be paid what you’re worth for your time.

Don’t sell your products at a budget price-point simply because you’re not as seasoned as your competitors. Starting a new business by offering a lower rate can be a good strategy and offer you a chance to build trust, respect and loyalty of customers. That said, keep in mind that sometimes quality is not simply measured by how long someone has been in business and that your time, effort and quality should be measured on it’s own merit.  Don’t allow Imposter Syndrome to make you think you’re not valuable because you’re not a veteran of your industry.

Be thoughtful about where you invest your time and who you align your business with. This tip may not seem like it’s necessarily about money, or selling yourself short, but don’t forget that every hour of your time you invest in something has a dollar value. In the beginning of business building it’s hard to know exactly where you fit and who it makes sense to work with, but be mindful in the intention of growing a peer network of people who will ultimately add to your business rather than detract from the time and integrity you put into it.

 

A Few “Bonus” Budget Boosters

  • Search for discount codes, and when you have a chance to ask a service or goods provider for a discount code or special offer before purchasing, don’t shy away from being bold enough to ask.  You may be unaware of how or where to take advantage of special promotions or specials they are offering.
  • Determine your annual budget and revisit it each quarter and again annually.
  • Find wholesale sites to buy things you purchase regularly for your business.
  • Use what you have before you invest in additional resources…(such as books/education/supplies).  Often we consume new information or buy new products before we’ve really dug into what we already have at hand and made good use of it.
  • Always overestimate. Things generally cost more than we think and take longer than we plan for. A wise tip concerning money and time is to always give yourself at least a small cushion and plan for more than you anticipate.  If you overestimate the cost of something, that’s just money you can put back in the bank!

I’m going to close with one last reminder.  Remember, you probably started this business or new venture as a means to change, improve or add to the quality of your life (and probably that of others.) It’s easy to get caught up in putting so much in to our business and into making it appear healthy and thriving, that we forget to tend to some of the smaller details that in the end can cost OR save us a great deal.

But…as I like to say “it’s not too late” to start making smart financial choices in your life and business.

Here’s wishing you health, happiness AND prosperity in the work you do!

Editor’s Note

(This blog post contains third-party links and recommendations from the author, however none of the links are affiliate links, and the author/site owner receives no compensation from any of the third parties in this article or their subsidiaries. Further, neither Arise and Bloom or René Robinson assume any risk for your visiting the sites linked in this article or use of the products or services therein. Visit and use at your own discretion and/or risk. The service providers listed here are merely suggestions based on the author’s personal opinion.)

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