Since money is something that makes the world go round, and is also most likely the main reason why you go into a business, it can’t be emphasized enough how important it is for you to control your home business finances.
Here are a few basic money management tips that I would like to share with you:
- Find the money that you need to start your small home-based business. I am delighted to say that many home businesses require very little
or no money to start up unless you are buying a franchise or a business opportunity from someone else. However, in view that some of you may not have employment income or have given up your full time day job to pursue your home business, as such, you may still need to have some savings to tide you through initially for paying your daily living expenses and so on. In this case, you may need help from family members and friends, and to make good use of the credit cards and bank loans available where need to.
- Keep track of your money. Equally important is that you must know how to keep track of your money, i.e. reinvest a portion of your business earning into marketing and advertising, invest in business tools to make your home business even better, spend in outsourcing to allow you more time to focus on more important business issues. To keep track of your home business money, you may need a simple accounting or bookkeeping software, however, if you know MS Excel well, I would say it is adequate enough to help you keep track of your inflow and outflow of cash.
- The right price for your products and services. Please don’t take this lightly, do the market research to set your price right. If you set your price too high, you will scare the potential customers away; on the other hand, too low a price, you may swamp with customers, but I doubt you will make enough money to stay afloat. The point is that, you need to charge enough to cover your business costs while generating a healthy profit to have enough cash flow/money to keep your small home business run smoothly.
- Retirement Planning. Since you are on your own, there is no body except you who are responsible for your money in order to have enough savings for your retirement needs.
- Pay taxes. Depending on your local tax law requirement, you may find you need to spare a portion of your earnings to pay the taxes due arising from your home-based businesses.
I will go into more details on managing personal finance and managing money in my future articles.
To your home business success,
Tan Kok Hui