As any small business owner will know, when you run your own show you have to master a multitude of different skills. It’s not enough to excel in the craft or talent you trained for. Almost overnight you need to become an expert in sales, marketing, project managing, customer service, and the list goes on…
But the one area I cannot believe so many business owners I talk to are not clued up on is MONEY! What’s more – sorry ladies – it does tend to be us females who are even less likely to be savvy about their cash.
Tackling the taboo
I was listening to the brilliant Holly Tucker podcast ‘Conversations of Inspiration’ featuring the founder of Vestpod, Emilie Bellet recently. Tackling the taboo subject of getting to grips with your finances, it totally struck a chord with me.
Now, when I first started out, I’ll admit there was no grand ‘business plan’. And I’m not saying that I have every aspect sussed even now, but blindly navigating your way through running a business without certain targets and financial processes in place is only going to end in disaster.
I’m horrified by how many people I speak to who don’t even have separate bank accounts for their work and personal income. It’s shocking how much mystery there is around self-employment and I wonder if this is partly down to our reluctance and awkwardness when it comes to talking about money.
“I soon began to realise that talking about money could – and should – be exciting. Not uncomfortable.”
When I first qualified and set up Vintique Upholstery I left behind a good salary in the fashion world. I thought that being self-employed put any hope of a mortgage or pension out of reach. Here I am now hurtling towards my 50s and that elusive pension pot is growing by the day.
Caroline Jones Photography
The turning point for me was taking sound financial advice. I soon began to realise that talking about money could – and should – be exciting, not uncomfortable. So, here are the lessons I learnt, and I hope they’ll help you too…
Practical ways to get smart about your finances
1. Change your money mindset
As soon as you charge your first paying customer you must, must, must start to act like a proper business. That means having structured systems for invoicing and separate bank accounts for your personal and business expenses and income. Act like a serious business owner and you’ll become one.
2. Don’t think of today, think of the future
My big regret? That I didn’t start paying into a pension sooner. I thought that having cashflow in my business made good financial sense. Nope. Tucking it away for your future and watching it grow is a much smarter move. These days I plan for my retirement and it’s a comfort to know I’m financially prepared for it.
3. Get serious and draw a salary
I was a culprit of not drawing a salary when I first started out. But trust me, having a guaranteed income allows you freedom and puts you in control. Even when things go wrong (yes, I’m talking about you Covid-19) it’s not luck but hustle, hard work, resilience and having your finances in order that will get you through.
4. Get a good accountant
So many people I talk to are disappointed with their accountants (that’s if they even have one). For me, it was a priority and it definitely makes a difference to the success of your business. The right one will not just calculate your tax and file your accounts, they’ll help you plan for the future and set yourself goals. Which brings me to…
5. Set yourself targets
Even with a small income, it’s crucial to think about how you want to scale your business. Money goals and milestones give you more of a strategy and focus and they’ll help you work towards something bigger. By setting yourself targets, you know what your business needs to achieve and there’s nothing more motivating to make you get there.
As a business owner, it’s so important to stay constantly switched on. I highly recommend listening to Holly Tucker’s podcast Conversations on Inspiration and checking out her website for all kinds of tips and support for the small business community.
I’d also suggest checking out the Vestpod website for relatable advice on managing your money.
Credits: Caroline Jones Photography, Andy Newbold Photography, Surrey Life Magazine and Linwood Fabrics.