Personal Finance Rules to Apply to Your Small Business

As you manage your personal finances, so too should you manage your business finances; responsibly and studiously. Here are 10 great tips that we found to help a small business owner:

1. Track your cashflow – You need to actually have the revenue you have earned in the form of payments or credit before you can spend it.
2. Avoid Taking on Bad Debt – Only borrow money you can both use now for a project with a worthwhile ROI and that you have the ability to pay back over the longer term.
3. Keep a Rainy-Day Fund – Just like anything can happen in your personal life that will require some sort of savings cushion, all sorts of issues could arise for your business that call for an emergency savings fund.
4. Budget Wisely – Use your accounting books to draw up a realistic budget that allows you to invest for growth where you will get the most bang for your buck.
5. Keep Meticulous Records – Invest in a software package or hire a bookkeeper to make sure you have all of your financial documents accurate and up to date.
6. Invest in your Future – See the forest, not just the trees. Don’t get caught up in the day-to-day operations of your company and miss opportunities to invest and grow. Set aside a percentage of your revenue and actively invest it in your future.
7. Spend Less Than you make – It sounds simple but it can take some time for companies to come to this understanding; become cash flow positive doing whatever it takes.
8. Taxes – Set aside 35% of your revenue for tax purposes. Deductions will likely make the bill lower and then you have a small pool of bonus money to use; use it wisely.
9. Build a Flexibility Fund – For those months/quarters where it’s raining revenue, save some funds for when it is not.
10. Retirement – Set up a retirement plan for yourself and your workers.

Financials don’t have to be overwhelming, stay organized and focused and make having a clean financial record a goal so that it doesn’t come to short periods of intense focus, which takes away from really running your business.

About Payplant

Payplant provides growth financing for entrepreneurs, by entrepreneurs. Its Pay Me Now^TM digital invoice-financing service provides cash to businesses when their customers pay too slowly. Payplant helps businesses with PO and Invoice Financing, Asset Based Lending, Term Loans and Customer Financing products. Payplant works with companies that don’t currently qualify for traditional bank financing, have grown too quickly for their current lender or are at the point in their evolution where an influx of working capital can elevate their business to achieve rapid growth. Payplant delivers fast and reliable funding, at very attractive rates and is completely on demand. For more information, visit www.payplant.com.