One of the very common problems of running a business from home is dipping into the bank account when you have the need for some money. The problem here is that if you keep dipping into it without knowing if you can afford it in the business, there will come a day when you have to pay for some business costs and there will not be any money to pay for them. This is a serious problem for the long term existence of the business.
As a basic method of knowing what you are taking in and what you are spending is by setting up an Exel spreadsheet. This is quite a simple way to track your budget and if you keep it updated every day, if not at the maximum every week, then you will know what you have available for personal use.
The Best Solution
For new businesses there is no doubt that the best solution is to look at your figures at the end of the month and see if you have a profit from which you can draw. Do try and take as little as possible in the first few months of the business. It is best if you can feed all your income back into the business for a few months, then you can see what your average sales may be and whether there is any money to draw upon.
Do keep aware of those annual expenses which could be car rego, insurance, website fees and so on.
If you are a manufacturer at home you need to make sure that you have funds to buy materials ahead of time if you have a peak selling season coming up.
Cash businesses are one of the most easily attacked businesses. Don’t believe that if you say “I will put that back tomorrow”, that you are going to. Tomorrow is another day and more often than not the money is not put back in the business.
Plan Your Purchasing
Planning your material purchasing or buying of software or whatever it is needs to be thought out and planned for. Internet businesses are worse than ever because every time you get on the internet you come across products to buy that will ‘enhance your business skills’. Make sure that whenever you see something on the internet it is going to help you grow your business.
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