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Finance Management

Posted by Logan Marshall on August 25 in Living a Professionals Life |

Managing your finances.

Working for an employer means you can often have a lot of your finances managed for you. You will be able to pay into a pension fund and you can sometimes receive insurance policies as part of your benefits package. This will all change when you set up your own business. From now on you will be responsible not only for all of your own finances but the finances of your business and its employees. This isn’t necessarily as daunting as it might sound and through good organization and extensive homework you will be able manage all of the finances that you are in charge of with very little trouble.

Your personal future.

There’s no pension plan for business owners to join so it’s down to you to save for your own retirement. Of course, if you offer your staff a pension you can pay into this yourself but you may want to consider other ways to save for the future as well. There are plenty of investment opportunities available for you to stake you hard earned money on, some of the are low risk and subsequently low return investments while others have much greater risk associated with them but potentially a much greater return. Life assurance policies are an excellent low risk opportunity while property investment will invariably make you money in the long run. Of course, you can always put money into a long-term savings account.

Taxes

. You are responsible for the tax payments of yourself and your business. You need to ensure that you keep enough money to one side to pay for both of these and you need to keep up to date records of every financial transaction made so that you can show where your figures have come from. This is where your organizational skills will really come in handy so put them to good use in making sure that your records are in order and your figures are accurate.

Budget

. The budget. This is a term that strikes fear into many people, but it shouldn’t. Budgeting is an absolutely essential part of your business as well as your personal life. A budget will include any incoming and outgoing money and by using an accurate budget you can keep track of your forecasted income projections and many other factors. Setting a budget for particular areas of your business is always a good idea otherwise you may end up paying much more than you can afford to on office equipment leading to a lack of money for product development.

Be frugal.

It is important that you look after the business. Making sure that you don’t throw money away on useless goods or services just because you have it in the bank is the first and most obvious thing you should do. Do you really need a coffee maker in every single room? If so, then you aren’t wasting money but, and I suspect this is more likely to be the case, if you don’t then don’t buy them. A bargain is only a bargain if you need the item in question.

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