6 Budgeting Tips for Entrepreneurs
July 21, 2022
What are the budgeting tips for entrepreneurs?
- Open Separate Personal and Business Accounts
- Set Aside Money For Taxes
- Track Every Transaction
- Haggle With Suppliers
- Identify and Avoid Unnecessary Expenditure
- Ask For Help From Financial Experts
Many people dream of starting their own business, but oftentimes, this enthusiasm falters when you start thinking about budgeting.
Let’s face it. Budgeting is not always enjoyable. In fact, it can be challenging, especially because the success of your business depends on it. Nowadays, many business owners wish they had done their budgeting differently.
To help you do it right the first time, it’s important to figure out how to budget. Whether it is by setting aside money for taxes or hiring freelancers instead of employees, here are budgeting tips for entrepreneurs you’d want to know!
Open Separate Personal and Business Accounts
As an entrepreneur, your personal life and work can end up being meshed into one most of the time. However, these two must be separated — especially when it comes to your finances. Setting boundaries between work and personal life for better work efficiency and less stress for you and your company.
One of the best ways to go about this is by opening a separate account for your personal life and business. You will be able to keep your bookkeeping accurate and you’ll also find it easier to do your taxes.
Set Aside Money For Taxes
Too many entrepreneurs, especially those who are new, tend to forget to pay their taxes. While this seems like a small mistake, it puts you at risk of getting audited.
To be safe, set aside about 30% of your net revenue every month for taxes.
Track Every Transaction
Make sure to keep track of every expense and income. Take note of even the smallest transactions. Doing this can help monitor if you are reaching your financial goals. Remember that the smallest costs can make a big impact over time.
Keep every receipt and update your financial statements. Keeping track of every transaction can help you avoid any mistakes when the tax season comes as well.
Haggle With Suppliers
There’s nothing wrong with questioning a supplier’s price as long as you are polite. Check if you can get a discount on your materials if you buy in bulk. Or, you can also pay them off early for more discounts.
Remember also to check for other suppliers’ offers and never settle for the first deal you come across. They might offer better prices.
Cutting supplier costs can go a long way in improving your business’s cash flow.
Identify and Avoid Unnecessary Expenditure
Businesses are supposed to generate money. So why do many entrepreneurs waste money on those they don’t need? Learn to identify and avoid unnecessary expenditures.
Necessary expenditures are the ones that actually generate money for you or differentiate your business from competitors.
Why spend so much on out-of-town business conferences when there is an option for virtual conferences? Do you have clients coming into your office regularly? If not, you might want to go for an office location with a lower rent. You might even offer remote work opportunities to reducing your office space needs.
Do you really need to hire a full-time writer, designer, or delivery staff? Consider outsourcing or hiring freelancers to save money on recruitment and training as well as equipment, office space, benefits, and taxes.
The money you save can go into profit-generating expenses such as paying highly-talented employees what they are worth to avoid retention problems, investing in software that serves customers better and investing in marketing strategies that deliver results.
Ask For Help From Financial Experts
Whether you need help with taxes or sales, a financial expert can help. Hiring a financial expert like an accountant or financial advisor can be worth it if you can catch budgeting problems early on.
Now that you know these budgeting tips for entrepreneurs, you will be able to manage your business better financially.
Need more business finance advice? Get in touch with Benito Keh — a prolific entrepreneur in the Philippines!