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Do you save money as part of your business finance system? (Do you have a system?)
Saving money as a business isn’t talked about very much.
Saving money on what you spend now, that’s talked about. A lot!
But who talks about saving money for future costs and investments?
Today I’m talking about how you can start saving for your business simply and easily and make life a lot less money stressful (it’s also one of the best ways to upgrade your money mindset for the long term).
A savings account for your business is one of the business finance basics, right after a separate bank account.
If you have a business bank account already, it’s easiest to open a business savings account with your current bank.
If you use a personal bank account for your business, you can open a separate personal savings account for your business (I’m not saying it’s permitted under the terms and conditions but people do it).
If you don’t have a separate bank account for your business, and it’s all mixed up with your personal money, open a separate bank account first. One, it makes your tax return so much easier. Two, you’ll need a separate account with Making Tax Digital.
You don’t need a separate savings account for each reason you want to save (paying yourself, tax bill, preparing for growth, investing in mentoring and coaching, when/before starting a business).
It is a good idea to know how much you are saving for each saving goal though so it’s not just a lump sum with no focus in an account (which is easier to spend).
A basic spreadsheet or notes in a notebook or app like Evernote or your phone are great for keeping track.
All businesses have times when cash flow is low, it’s just a thing.
The real issue is how good your planning for this is, so it’s ‘move money time’ rather than ‘I can’t pay the bills time’. The first is a nip into your bank account and a few clicks, the other is serious stress.
This isn’t for cash flow blips, it’s more for times of unexpected low income.
Unexpected doesn’t mean unpredictable. For example:
These kinds of savings are more than ‘only’ paying yourself (and your team) if there is a problem (or seasonal variation).
It’s peace of mind and good planning of your business finances.
That’s what makes the difference when you’re preparing for growth, exploring upgrading from sole trader to a limited company and want to pay yourself on a regular basis.
It’s even more essential if your business is a limited company and you take a salary.
Getting Paid As A Limited Company
Demystify Limited Companies Workshop
If you’re interested in working with me one to one, book into my calendar for a chat about Prepare For Growth Mentoring.
Do I need to explain this one?
Your business profit will be taxed.
If you’re a sole trader, the first time you pay may be 18 months of tax at once (it’s called ‘you did real well’ and Payment On Account).
It’s one reason doing your self assessment earlier is a great idea as you’ll know your tax bill ahead of time and you don’t need to pay the bill until 31 January, whenever you filed your self assessment.
If you have a full time job as well as your business, it’s even more important to do your tax return/self assessment earlier as it means you have more options for how to pay)
Tax Return Success group coaching
It’s so important for your stress levels that you have the money to pay your tax bill when it’s due.
It’s the best reason to have a savings account for business and it’s saved the bacon of more than one of my clients after they followed my advice.
Ideally, you want to be putting 50% aside and a minimum of 20%.
If you really can’t do that, do what you can and start working on self care for your business finances as a priority. You can’t grow as a business if you’re stressed about a tax bill.
Self Care For Your Business Finances Retreat and Resources Pack
This applies as much for you if you have a limited company as for sole traders.
Ask your accountant to help you plan your tax bill so you know how much to put aside for corporation tax and dividend tax.
Preparing your business finances for growth isn’t talked about much either and yet it’s key.
If you don’t have sustainable financial systems in place, how can your business grow and flow?
You may be a sole trader growing into a limited company.
You may have a growing limited company and it’s time to understand the financial behind the scenes.
You need savings in place for salary, uneven cashflow, more costs with relative lower income.
If you’re interested in working with me on this, book into my calendar for a chat about Prepare For Growth Mentoring or find out more about the Demystify Limited Companies Workshop.
Hands up who has wanted to invest in a mentor, coach or course and doesn’t have the funds when you need it?
How frustrating is that?
Especially when you feel you’re ready and the timing is right.
Savings like this is like having food in the fridge instead of running out of food before you buy more.
It’s taking the day off on your birthday instead of working like a normal day.
It’s also probably the most fun way to start saving for your business and the easiest if you’re not used to it.
Fabulous person I want to work with who will help me get more in flow and help me grow my business? Absolutely, let me just transfer the money from savings. And done.
I want to cover a few reasons why you might even want to start saving for business when you have a new business and before you start your business.
Getting Paid: Saving For Tax & Your Future
If you’re interested in working with me one to one, book into my calendar for a chat about Start Your Business Mentoring.
Getting Paid: Starting A Business
If you’re interested in working with me one to one, book into my calendar for a chat about Start Your Business Mentoring.
Hi, I’m Rosie Slosek.
I mentor women to get clear about their business finances so their creativity flows & their business grows.
If you’re a woman entrepreneur – or want to be – and you want to get clear and confident about your business finances, book a chat with me to explore how we can work together.
You find out more about me here.
Rosie x
Start your business, help you do your sole trader tax return, expenses, explaining limited companies.
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