Money management is one of those topics many virtual assistants and small business owners routinely put off and hope for the best. It’s front and center on the mind on April 1st in anticipation of the April 15th tax deadline, but then it goes straight to the back burner for the rest of the year. Bookkeeping and money management are best practiced year-round. When done this way, it gives you rewards of more money, more peace of mind, and above all else, a happy IRS!
Smart business owners know the importance of good money management and apply tactics in their business to actually help them. The following tips are sure to help.
Best Money Management Tips For Your Virtual Assistant Business
Be Smart And Continually Learn More – Learn as much as you can from the get go. It’s often said it’s not how much money you earn, but what you do with it that counts. Totally applies to business decisions regarding money management and budgeting. Follow those you know on social media who offer business and money tips. Read all you can and know that especially in March and April many will be posting more business tips. When you see a tip you like, keep it and see how it can apply to your own business.
Track Your Income and Expenses – Seems silly to state the obvious here, but you’d be surprised at the number of business owners who haven’t got a clue about their operating costs, net income/loss, cash flow—none of it. It’s easy to see all of the income and expenses you incur on a regular basis if you keep records and write everything down. Don’t close your eyes (and your Quickbooks file) and hope things works out. By writing everything down or entering it into accounting software, you are well aware of your business status and can then plan business finances and make smart decisions on a regular basis.
If you don’t have accounting software that’s okay… log it all in a binder or Excel spreadsheet. For large purchases (anything over $100) include item description, use in business, date purchased, what you paid, and any model or serial numbers. Then you have an accurate accounting of items for tax purposes, an insurance record, and for software user licenses.
Budget for The Year Ahead & Start Making Good Choices – Create a budget and stick with it as best you can. Be honest and know that each year you will get better at this. Put away money for taxes. Save for expenses. And don’t buy things you can’t afford. Review this budget throughout the year. Honestly nothing beats looking at your budget and realizing how well you are doing.
Also, know that with your virtual assistant business, income might differ month to month. On those rock’n months, put extra away to compensate for any slower months or invest it back into your business.
Review Your Books Monthly. How much did you make? How much did you spend? Were these smart decisions or are there ways you can improve. While many business owners review their accounts monthly, they don’t spend time looking for ways to improve. That’s where the magic happens. By reviewing and analyzing them you also see if you need to make major business adjustments and also can identify trends so you can plan accordingly for upcoming years.
This cannot only save you money, it will also allow you to see if there are any mistakes. Yes, mistakes happen. For example, were any automatic payments taken out that shouldn’t have and more? While you are reviewing these, take a minute to consider if you are fully utilizing the services you are paying for. Is there a cheaper alternative that can still give you similar results?
Pay Yearly When Possible – If you know you have ongoing expenses, whenever possible pay for the year instead of making monthly payments. This can save you a considerable amount of money as normally businesses give discounts for annual payments. Web hosting is a good example of this. Look for other cost saving tips as well.
Make Money by Being an Affiliate – For those services you use on a regular basis, consider signing up as an affiliate. Refer colleagues to this service you know, like and trust so they can reap the same benefits in their business. As a result, you can earn affiliate commission to help offset your costs for using the product or service.
Put Money Away – We hear you, who has extra to do this? But once it becomes a habit you will find you don’t even miss the money. Set up a schedule that works for you. Start small if you need to with the main goal of simply getting into the habit of saving. Put it in a savings account. This can be your emergency fund for when your computer gives you the blue screen of death or your accountant says you owe more than you thought.
Good money management helps you get—and stay—excited about your business. Done right, it will enable you to save more money and invest wisely, in the right areas. When you have a good handle on your money matters it will directly result in a more successful and satisfying experience as a small business owner. Ultimately, knowing what the bottom line is will enable you to better focus on the right areas of your business. Or, you’ll have peace of mind that you’ve got things under control.
Diana Ennen and Kelly Poelker are the co-authors of Virtual Assistant – The Series: Become a Highly Successful, Sought After VA. Stop by their site for complete information on starting your own VA business http://www.va-theseries.com. Connect with them on Twitter at @learntobeava or at facebook.com/becomeava