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Starting a business at home can be a fantastic way to boost your income and bootstrap your expenses.
Whether you do it yourself or use a service, staying on top of your finances is a must. Being in control of your money not only crucial for your business' survival, but will help you build up your wealth.
5 Tips for Entrepreneurs to Manage Their Finances
I know that cash flow can vary month to month when you're an entrepreneur, so here are some tips to help you smooth out the bumps.
- Keep your personal and business finances separated. As soon as you can, make sure you have business accounts for your freelance or side hustle.
- Build a cash reserve. No matter how good you are, there are sme things out of your control. I've had deals fall through and having savings was a huge relief. Prepare now and grow a cushion.
- Track your expenses and income. You have to be aware of your cash flow constantly. When you properly label your expenses you also make things easier come tax time.
- Diversify your income. Even if you have fantastic clients or services right now, make sure you have different income streams. For my business, I have some seasonality with my income so when one partner slows down, I can focus on others to keep the cash flow going.
- Reinvest in your business. Finances can be tight at the beginning, but one of the best ways you can speed up your growth is redirecting your income back into your business.
When you're starting out, your finances can be fairly straightforward and you may be able to handle all of it yourself.
As your business grows, though, you need to start searching for partners, tools, and services that can help you run it while you focus on what matters.
Thankfully more professional and affordable options are becoming available for entrepreneurs.
Xero: Online Accounting Solutions
Xero can help you quickly track your business finances. They specialize in serving small and medium sized business all around the world.
With Xero you can easily manage invoicing, bookkeeping, and more. They also have a mobile app which can be crucial as you run your business.
Cloud based and focused on innovation, Xero keeps its service updated, giving you the latest without having to worry about downloading and installing them yourself.
Xero can also make mundane and tedious tasks like reconciling bank accounts much easier. You can collaborate with your bookeeper or accountant through Xero too.
Xero can be a great solution for you if you've built up a steady income and you need to offload accounting so you can take it to the next level.
If your business is just launching, tight on money, but are struggling with finances already, Xero has an affordable option starting at $9/month.
To find out more and make sure it's a good fit for your business' needs, go and check out Xero.
Thoughts on Xero
I'd love to learn more about how you do business. How many of you use a service (Xero or otherwise) for your business? When did you switch over? How has it been working for you?
Disclaimer: This article contains some affiliate links. At no extra cost to you, I receive a small commission if you make a purchase through select links. I recommend Xero because it rocks and all opinions expressed here are my own.