Three Steps to Better Finances

A lot of people I’ve worked with are scared of their numbers. They don’t want to look at them, they’ll change the topic or just “run away” from them. But with knowing your numbers, it can empower you to make informed decisions that’ll increase profit, minimize mistakes, and help you plan for your future.

I’m all about simplifying your bookkeeping and finances to take the stress and fear away, and make your life as a business owner easier. Simplify things so that you can get back to doing what you love!

Here are three simple steps to better finances: 

Separate your business and personal finances

It makes things SO MUCH EASIER when you go back to do your bookkeeping, tax deductions, etc. I work with a lot of service based, creative entrepreneurs and I often see people start out with their business as a hobby. However as soon as you make your first investment into your business (whether it’s supplies, a computer or iPad, DSLR camera, etc), that’s when you want to separate your finances. Don't wait until you get your LLC, start right away!

Keep a detailed record

Whatever your offer is, track and record each on separately. Let’s say you’re a coach and you offer 1:1 calls, a group program, and an online course. Maybe you’re a brand designer and you do branding, websites, an intensive or workshop, and a digital ebook going through your process. Track each one of your revenue streams separately.

Why is this important? As you evaluate your business at the end of each year you can clearly see which offers did really well, and which ones didn’t. Then you’re able to make data-informed decisions about if you want to keep all your offers, tweak some, or maybe stop offering some.

With that, you also need to be tracking your expenses. Things like subscriptions, advertising, investments... Not sure what is considered a business expense? Grab our biz deduction guide to understand all about it.

Your net profit (income - expenses) is what you want to look at to inform business decisions.

Schedule time to do your bookkeeping

Set a time slot weekly or monthly to look over your finances. Using software like Xero or Quickbooks makes this process much simpler. As a bookkeeper, even I have to schedule time to do my own books or it just doesn’t get done. So mark your calendars and have that bookkeeping date with yourself and your biz! 

 There you have it! My final tip for you today is to work with an accountant or bookkeeper (or both 😉), especially if finances stress or overwhelm you. Working with an expert takes out the guesswork and uncertainty and frees up your mind to focus on what you really love to do.