Hey Future Millionaire Besties! Starting a business is exhilarating—and it’s easy to get caught up in the rush of new opportunities. But before things take off, it’s important to build strong financial habits to keep your business financially healthy. Here are five foundational habits that can set you up for success, from day one to growth and beyond. If you have any more tips, be sure to let your fellow millionaire cousins know in a comment!
In the beginning, it might seem easy to skip tracking the occasional lunch or office supply, but every penny counts in business. Developing the habit of recording each expense not only helps with tax preparation but also gives you a clear picture of where your money is going. Using a simple app or software can make this habit stick, allowing you to capture expenses in real-time and helping you see where you can save.
For small business owners, tax season can be a stressful surprise without proper preparation. A top habit to establish is setting aside a percentage of monthly revenue for taxes. This way, you won’t be caught off-guard by a tax bill at year-end. Using a separate savings account for taxes can also help you resist the temptation to dip into this reserve if you don’t have discipline. If you’re disciplined, you can use these funds as additional working capital to help build your business. An expert tip would be to speak with a Tax Advisor or CPA to maximize your deductions and keep that working capital just that without giving it Uncle Sam! Remember it’s okay to AVOID taxes, it’s illegal to EVADE them!
Understanding your cash flow is crucial to making informed decisions. Every week, set aside time to review your income and expenses. This will give you a quick snapshot of whether you’re operating at a profit or a loss. A cash flow habit doesn’t have to be complicated—keeping it simple with a short review can give you insights to adjust spending, plan for expenses, and make strategic investments.
A budget is a fundamental business tool, but it’s often neglected by new business owners. Make it a habit to create a monthly budget, breaking down expenses into categories like marketing, supplies, and operating costs. At the end of each month, compare your actual spending with your budget. This way, you can see what’s working, what isn’t, and make adjustments for the future.
Building an emergency fund from day one is one of the best financial habits a business owner can have. Even if you start small, setting aside funds every month can provide a financial cushion when unexpected expenses arise or when business slows down. An emergency fund not only protects your business but also gives you peace of mind to make growth-oriented decisions.
These five habits are super simple, but super effective in managing your business’ finances. Keep disciplined and watch your business flourish!
To your success,
Your CPA Bestie – Avery A CPA