Having your own business is great but if you don’t look after your money it soon disappears. Here are some tips for managing your wealth once you get it.
1. Get an accountant. Although you might be thinking that they are an expense you can do without right now, or your budget doesn’t allow for one, trust me they are worth every penny. A good accountant will save you at least 5 x what they charge. They will give you advice on what business structure you should have, how you can pay less tax and insurance and how you can save money on interest payments etc. They will also keep you up to date with tax laws so that you are not unknowingly doing something that might cost you a lot in the future in fines.
2. Set yourself up as a limited company rather than a sole trader or partnership. It might cost a little more to do but the rewards and benefits far outweigh the costs. Although the recent changes to dividend payments mean that you won’t get away with paying no tax, you will still pay far less if you are a director of a limited company drawing dividends than if you pay yourself a wage. Your accountant will be able to set it all up for you and explain it in more detail.
3. Think before you buy. The internet has made impulse buying almost a natural event. It is so easy to get something now with one click that we buy things without thinking about it. Beware! This could be costing you money that you could better use somewhere else. Not everything on the internet is the cheapest or best. The internet should be used for research and comparison purposes and it is great for this. Use this information to shop around, your local independent might be cheaper than the national organisations. Don’t spend money on something you could do yourself. I have heard of people who are still spending thousands of pounds having a website built. You can do this yourself quite easily with WordPress, if you can use Microsoft Word you can use WordPress.
4. Put everything you can through your business. It took me quite a while to realise that I can claim for most things. When you are a limited company you pay tax on what is left after you pay for everything. This is the opposite to employees who pay tax before they spend anything. The more you spend through your business, the less tax you will have to pay. Again your accountant will be able to give you lots of advice and support on this.
5. Re-invest. It is tempting to spend what you earn in your business, particularly if that is what you are used to doing as an employee. As a business owner though you need to keep some back to re-invest in new machinery, new premises, vehicle maintenance, advertising budgets etc. You should obviously get more back in return than you invested if you are doing it correctly so this is a far better use of your money than blowing it on a round the world cruise, that can come later.
These tips were shared with me by one of my mentors when I first started in my marketing business. They have been very valuable to me and have stood me in good stead. I hope they help you too.
07736 396519. email@example.com Skype: lynne.thomas33
Lynne Thomas – Business Development Coach.