Personal finances can be a challenge for many people, but when you are also trying to
operate a small business, it can be overwhelming. When your personal finances and
business priorities are not aligning, you may feel like you’re always juggling.
Fortunately, there are some personal finance tips that can help you to grow your small
Set Up Your Retirement Fund
The first absolute basic of personal finance for any entrepreneur is to set up a
retirement fund. Like all workers, you need to be prepared for your retirement and
knowing this is taken care of can allow you to concentrate your energies on your core
You don’t need to pull a lot of money into the fund, but savings now will help to curb
your tax bill and you can grow as tax deferred savings until you decide you want to use
your funds for retirement. There are a few options for retirement plans, so be sure to do
your research to ensure that you choose a plan that will help you to meet your
While it can be tempting to plow all of your money back into your business, you need to
think about diversifying investments. Of course, reinvesting your personal capital into
your business will help it to grow, but this can be a risky investment. Allocate funds into
other investments even if it is a basic savings account, so you provide yourself with a
little breathing room. In a worst case scenario, if you need to cease trading, not all your
personal assets will have been sunk into a failed business.
Plan For Your Off Season
Most businesses don’t have the same turnover month after month. As a small business
owner, you’re likely to be aware that you will have irregular income throughout the year.
So, it’s essential to plan for those slower months and set up an emergency fund to allow
you to weather any tighter times.
Separate Your Personal and Business Finances
Small business owners often find that separating personal and business finances can
be particularly tricky. Since you are so interconnected with your enterprise, it is easy to
think that your business is you and you are your business. However, this should not
apply to your finances. Keeping your personal and business finances separate will
make dealing with tax season easier, remove personal liability in case of business
issues, eliminate the burden of your business finances from your personal accounts and
provide your business with more legitimacy and credibility. You should have a business
bank account and separate credit card for your business expenses; additionally, this will
also help to build your business credit.
Seek Professional Tax Advice
Finally, it is crucial to seek out a professional for all your business tax issues. The
current tax law for small business owners in the U.S is complex, and this can be
extremely time consuming for a busy entrepreneur to grasp. Speaking to a tax
professional will help you to assess your obligations and get your tax burden right, the