This week, we are going to share practical tips on cash flow management for Solopreneurs and Startups.
1. Segregate your personal and business expense
Generally, if you are a Solopreneur or Startup, being a one-man (or woman) show, or small companies, you tend to mix up both your personal and business expenses. I know...I know, it’s inconvenient but by segregating your expenses, you will then be able to ascertain the true operating revenue and costs. These are pertinent information to determine the sustainability of your business.
2. Pay yourself a salary
No matter how small, pay yourself a salary. It’s not the amount here that matters, it’s the habit of paying yourself. The accounts should reflect your salary as an operating cost, at the end of the day, your precious time is money, right?
3. Do up business projections
With the numbers on operating revenue and costs, do up projections on how long the company funds can be sustained. Understandably, the cash flow for small companies may be erratic and inconsistent but having a biz projection plan and seeing the fixed expenses you have to fork out every month will give you clarity on how much is the shortfall, and may also provide the added motivation of bringing in revenues.
4. Setup corporate spending plan
Setup a business spending plan. Allocate percentages of your funds broadly into Marketing costs, Admin costs, Operational costs, so you know how much to spend for that month.
5. Charge legitimate business expenses to business accounts
All business expenses should be charged to business accounts, as some may be tax deductible.
Note: If you manage several businesses, ensure you apply all 5 to EACH of your business.
Do feel free to contact us for more information or further queries.