Whether you sell your creations on Etsy, spray tan clients out of your garage, or teach preschool out of your spare room, being a mother and a business owner can suck the life out of your multitasking skills in a jiffy. Unfortunately, there’s one thing you mustn’t forget to keep on your to-do list: managing your finances. Here are a few tips to make sure you keep things looking green for your home business.
1. Open a business checking account
Having multiple bank accounts might seem like a lot to juggle, but it really will make things simpler for your business. A single account for your business gives you a clear and precise picture of what funds you have available.
The problem with banks accounts is that they have fees, and business account fees tend to run quite a bit higher. Usually there are ways around those fees, like using direct deposit or maintaining a minimum balance. If you are legally able — and more comfortable — to keep your business money with your personal bank account (which you can do if you are a sole proprietorship), setting a separate savings account can help keep funds separate.
2. Get paid
If you don’t keep up with your billing, you won’t get paid. Make sending invoices a priority! Set regular time aside for sending invoices, or switch to more efficient billing methods, like using PayPal for online orders or Square to take in-house debit or credit card payments.
3. Withhold taxes, and keep up with quarterly tax payments
Get ready to open yet another savings account. This can help you pay (monthly, perhaps) toward your quarterly income taxes before they sneak up on you. Meet with your tax advisor or accountant regularly to determine how much to withhold from your profits.
4. Keep records
Keeping track of your expenses and income is crucial to not only measuring the success of your business, but also for tax and other business purposes. This could mean hiring a bookkeeper, buying a receipt scanner, using accounting software like QuickBooks, or using helpful apps like Expensify on your mobile devices to record your spending.
5. Remember your retirement
As a small business owner, you are solely responsible for your retirement savings. You have a range of possible retirement plan options, from SEP to SIMPLE IRA plans. Discuss your options with your tax or financial advisor. Even a small, regular investment of $25 or so per month is helpful.
