As an entrepreneur it is important to identify and assess self-employment needs and at the same time gain access to affordable self-employed loans to meet them as you capitalize on new opportunities.
Reasonably priced and accessible financing is a crucial tool to support your business. In business parlance, this is called, ‘financial capability’. You need to meet the financial management needs that continually change and grow eventually as you run your business. But it requires skill to manage your finances. If you want to put your business plan into practice and too see the level of growth that you expect, you need to start practising your financial skills. It is the only way to track and measure your performance and minimize losses as you solve financial problems and explore new opportunities.
You can start with these money management tips that can help you hone your financial management skills overtime.
Make a Budget
Sometimes, we ask ourselves: Where did my money go? We often don’t know where our money goes due to the fact that our expenses haven’t been well planned out. This is one of the main reasons why having a proper budget is a must. When you have a budget, everything is in place- and the good thing is, you can also save money. There are three steps to making a proper budget. Number one, know your expenses. As mentioned earlier, we often do not know where our money goes. So, knowing where it does go is a must, just so you can make sure things don’t go haywire from then on. Number two, grab a journal and a pen, then write every expense you’ve made for the past month.
Rank them chronologically- from more important down to least important. Then, step three, allocate an amount for each. Draw a pie. It’ll be easier that way. The whole pie equates to your salary/income for the whole month. Then you begin to divide the pie in accordance to what’s most important to least important. All you need to do now is stick to your budget and hope all turns out well. It may not be easy, seeing as you may not be used to having a budget. But pretty soon, you’ll get the hang of it.
Don’t touch the tax money
If you don’t want to be in any trouble with the law, don’t use the tax money for any other purpose—than taxes.
A good business need to have the right financial capabilities—which is possible if you recognise the importance of paying your financial obligations and avoid using the money allocated for one item to fill up your cash shortage.
It is important to take a proactive approach to financial management of your day-to-day operations by looking for ways to meet your needs without destroying your budget. That’s why when you are tempted to sue the tax money—look for other financial resources available to you, like incomes or available self-employed loans.
Taxes, like bills will come knocking at your door when you least expect it to. Well, to avoid these kinds of situations, you should include taxes payable in your budget- which was discussed before. Whether we like it or not, taxes are always there- when we buy clothes, food, grocery, etc. But aside from the taxes we pay while shopping, there are other taxes that we are obliged to pay. This is a government requirement, so there’s no saying no to this. You just have to set aside a piece of your pie budget for your taxes payable to avoid any more conflict.
Look at the bigger picture
How much of your loan proceeds would actually help you improve your business? How much can you save when you choose one loan product over the other? Remember that your budget comes in percentages. Each piece of a pie equates to a certain percentage of your income and a certain amount, also. If you put 10% of your pie to savings- then you should stick to that, regardless of the budget you have. For example, you could have a thousand dollars or just seventy bucks- you should still put 10% of that $70 to savings. This is where you will learn how to budget properly. When you make a financial plan, you should stick to it, to avoid any financial struggles in the future.
Load up your emergency fund
There will always be emergencies – some surprise expenses will just pop out of nowhere, as you are completely unaware. Always be ready. Put a small percentage of your self-employed loan proceeds to your emergency funds. At the end of the month, if it’s untouched, don’t spend it. Include it in your budget for the next month. That way, you can have more money to dip into when emergency needs arise. When your emergency requires more money than you thought, at least you have a backup fund.