2 Key financial tips for entreprenuers!
An entrepreneur is someone who jumps off a cliff and builds a plane on the way down! Leaving your job and embarking on your dream entrepreneurial journey is never easy. The self-employed people usually face several financial challenges, as their income may not be as regular as the salaried class. At the risk of sounding pessimistic, here is a popular stat.ÔÇØ50 per cent of enterprises fail within the first year, and 95 per cent, within the first five years!ÔÇØ
So all you have to do is, develop a fool-proof financial system around you. Here are just 2 things, you need to focus on.
Placing funds across other side businesses, alternate investments, or by just setting aside reserve cash, you will give yourself the much needed breathing room. This is help you operate independently with consistent growth and more exciting opportunities. For beginners, first open and maintain the following bank accounts:
Tax account: If you are drawing money from your venture or if you are reinvesting your income, in either case tax needs to be paid, and this is higher than what you used contribute as a salaried employee. Keep this portion aside every month for your tax obligations.
Retirement fund: While you may feel you can continue working forever, destiny may think otherwise. Hence, set up a retirement fund.
Saving and Investment account: While saving and investment is a must for every individual itÔÇÖs of paramount importance for an entrepreneur. Smart investment decision can secure your future and help you build your business even further.
Buffer account: This account should only be touched during rainy days, as it will provide the blanket of security every self-employed person needs.
However ensure that your business and personal accounts are maintained separately, as it will help you save money for yourself and not lose it all in the business.
2. Simplify and digitise routine bill payments
As a self-employed individual, time is of utmost essence to you, tasks that could have been handled easily when you were salaried seem difficult now as you are always racing against time to get your work done. Automating and securely digitalising wherever possible is crucial. Let the digital forces take care of utility bills, telephone bills and renewal of all your business related subscriptions. Ensure all these bill payments are made through one reputed money transfer provider who offers many convenient and accessible ways to pay your utility, insurance or subscription bills.
A little bit of planning combined with a viable spending strategy will make sure that your business can endure any possible lows and make the most of the highs. You may miss the stability of working as a salaried employee, but if youÔÇÖre smart, you can have more stability all by yourself!!