Content Type, Financial Insights | September 22, 2017
Written by: Erika Anne Ledesma
Flying solo on any business venture mean you’re prepared to face the challenges of relying only on yourself to make things work. There are times when you get lower profits than expected, and your income may change on a monthly basis.
Like any other business, you have good days and when you’re just starting out, a lot of bad days. It makes balancing your money more difficult, and often hard decisions have to be made, especially if you’re just beginning to fatten up that backup savings account.
Here’s a secret: saving money starts with changing your outlook on spending. Saving money isn’t actually spending less, but spending smart–after all, there would be times when you would need to sacrifice some of your money for the good of your business. The key is to choose wisely where to spend your money on not only in terms of your business, but in your daily life as well.
As a solopreneur, you need to think about how to budget your money, where to spend your limited resources on, and how to manage your time efficiently. The below three challenges are three of the biggest that businesses tend to face.
Rational budgeting involves looking at your spending trends, expected income and expenses, cost of living, and other factors so you can come up with a specific amount for each spending category, emergency fund included.
Creating a rational budget can eat up a lot of your time as each fund starts at zero, plus you have to consider all the factors involved and track each and every spend. In addition, because the amount of your income varies on a monthly basis, it will be hard to balance things out. Fortunately there are tools you can use to help you out–we’ll go into those later.
Solopreneurs often work with tight finances and limited resources. To make a profit, you have two options: increase your revenue or reduce your already-limited expenditure. It’s difficult to do the first without sacrificing the quality of your work, especially since you’re going about your business on your own. The second is more doable, and it involves reducing your operational costs by taking advantage of what technology and the online world has to offer.
The great thing about being a solopreneur is that you’re your own boss, and your time is your own. The bad thing about being a solopreneur? Well, you’re your own boss, and your time is your own. But time is money, and if you don’t manage your time efficiently, you probably won’t be able to do what you need to do to keep your business going. For solopreneurs it’s only too easy to fall into procrastination and set aside urgent tasks for later. Not good!
So how does one overcome those challenges? Check out these smart tips and valuable tools to help you focus your business’ limited budget, time, and talent so you can save money and build a successful business:
Though one fund sometimes dips into the other, personal and business finances should stand as separate entities so you can manage your money more effectively. One thing that you may find useful in this regard is using a business credit card for work transactions.
Credit cards have a lot of different features and benefits depending on the cardholder’s typical usage patterns. Check out credit card reviews to get an idea of annual fees, interest rates, signup bonuses, reward programs, foreign transaction fees, and other fees a card comes with to help you decide which one would fit in with your business nicely.
There are plenty of tech tools you can utilize to help you with the aspects of running a business that you may find difficult to do, such as project management and task scheduling. There are several productivity and finance-related apps that can help you manage your time and budget more efficiently so you can focus on the more important aspects of your business.
Project management tools like Basecamp, Timely, Toggl, Centrallo, Slack, Harvest, and Trello have different features that let you schedule tasks and deadlines, create checklists, keep files organized, do time tracking, and collaborate with others when needed. Each tool offers different packages, some of them free that can help solopreneurs streamline their work process and achieve project efficiency.
There are also tools like Zapier that you can use to automate different business functions such as email responses. By leaving the repetitive tasks to automation software, you’ll not only be able to save time but also eliminate the possibility of human error.
To help you keep your business and personal budget under control, use expenditure-tracking tools such as Mint, Moneytrackin’, and SavvyMoney. These money saviors can help you get a better picture of where you stand financially, including your credit score.
These tools allow you to track not only business-related expenditures, but also mortgages, loans, and other financial features. You can also add invoices, receive advice on economical spending, and even check out loan offers.
There are also online solutions that enable you to automate your savings, so that when the money comes in, it automatically goes to a savings account, insurance, or an investment you have set up.
It’s easy to freak out when the numbers aren’t adding up, but stay calm. Most solo business ventures start out this way, but if you follow the tips and use the tools mentioned here, you’ll soon be able to get your business where you want it to be. Create a rational budget, make smart expenditure choices, and manage your time efficiently to be in control of your finances and save money, and ultimately make your business grow.
Erika Anne is a freelance writer who was always an independent spirit, following her calling to save the planet, and floating with the will of the wind. When she’s not writing, you can find her in the sea swimming with the turtles, on a mountain scaling the summit or in her room wearing a unicorn onesie while binge-watching NatGeo Wild and Netflix series.