Friday, 12 October 2018

MONEY SAVING TIPS FOR SMALL BUSINESS OWNERS

I’m honoured to be speaking at Startup & Slay on the "Managing Your Money" panel.

Organized by #howshehustles, Startup & Slay, is part of a full-day meet-up in downtown Toronto for diverse female entrepreneurs to share information, inspiration and advice on how to start & scale a business.











                      
My job is to help female entrepreneurs manage their money better.

Here are five tips:

Separate, Separate, Separate
When you first start your business it’s very easy to use your personal bank account to pay invoices and deposit income.  Even if there is a bank fee involved, the best way to keep information separate is to have a separate business bank account, or at the very least a new account that you plan to use to manage your business from.  Also for expenses apply for a new credit card to charge them too. When it comes to tax time it will be easy to reconcile all your business receipts.

Be Consistent with Invoicing
Invoicing is the way small business owners and entrepreneurs get paid. It can be overwhelming especially if you come from a background where you worked full time for a company and did not have to worry about the administrative side of your job. Set aside one-half day a month to review all your invoicing, send out current invoices and remind clients of any invoices that may be overdue. Once a month is how I do it, but if you have a busy business you may have to do this bi-weekly, weekly or even end of the day. But whatever you choose, be consistent.

Don’t Forget to Save
As a small business owner, you are required to remit HST to the CRA.  You are also responsible for paying income tax throughout the year. This amount is based on what you claimed as your total income for the previous year. When you get paid make sure you're putting money aside to pay these bills. As a small business owner, there’s no pension plan. Don’t get off track with your retirement planning, make sure you are putting away at least 10 per cent of your before-tax income. As an entrepreneur, your income can fluctuate, make sure you have an emergency fund, in addition to your retirement savings, which represents at least 6 months of your cost of living.

Watch Your Expenses
It can be really easy to overspend if you see everything as a tax write off. While its true many expenses that were out-of-pocket during full-time work can be write-offs. Parking fee for an event where you’re speaking at, write off. Pens and paper for your home office, write off.  Tickets to a conference in your field, write off. But remember you will get only a portion that money back, it only works to reduce your overall income tax bill. Keep spending in check, otherwise, you may be spending all your profits without knowing it.

Use Technology for Good
We are all guilty of putting our bills on autopilot. We set them all up to be paid directly from our credit card or bank account and forget about it. Now, this can help avoid late fees and ensure your bills are always up to date. But it can also cause us to miss extra charges and fees that we should be disputing. Also when we don’t see the bill its harder to be critical of when costs go up. Use technology, whether it be to manage you invoices, pay your bills or add up your expenses, but also keep an eye on what is coming in and out of your bank account to see where too much money has been spent. 

Video from last Startup & Slay event. 


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