Lately, one of the biggest questions on people’s minds seems to be this: “How can I keep on the right track (of treating my business like a business) and not get distracted?” At least, that’s the question on the surface. Most people, when they ask this question, are actually wondering this: “How do I structure and handle my business finances so that I can stay on target?”
So here’s the good news – if you’ve ever wondered about either of those two questions, here are the answers to keep you (and your business) on track and distraction-free.
The single most important step to distraction-free finances for your business is to get a separate account. That and to keep your personal and business finances separate.
Now, if you’re worried that you need to get your LLC or corporation set up first, let’s shine some truth on that common misconception. It’s simply not true. In fact, the longer you delay setting up a separate business account, the harder it gets – and the more complicated your finances and taxes get.
So do yourself a favor. Go in to your bank or credit union and open up a damned business checking account already! You can go in and open that up as a sole proprietor and use your social security number. As things grow, you can always revisit or change that by talking with your lawyer.
Now that you’ve got a business checking account, it’s time to change and strengthen your financial mindset. How do we do that? Simple: by ditching the unhealthy, unsustainable “paycheck-to-paycheck” (or “client to client”) mentality and graduating to a mentality where you acknowledge your value, and the money block is a thing of the past.
Okay, but how do we start making that shift? Start by switching your payments to go into your business checking account. Whether you use PayPal, Venmo, Square, cash, or check, send that money into your business finances. Totally separate your business finances from your personal finances.
That way, you’ll be able to start giving yourself a regular paycheck – and quit seeing a low balance as a “crap I need to find a new client yesterday!” moment of panic. Why the subtle shift? Because as you begin to see your business as your source of income, rather than your clients, you’re going to be more willing to invest back into that business – with time, money, and other resources that will have amazing dividends.
Now that your business is set up to succeed, it’s going to transition from hobby to a successful business. And that means that you’re ready to graduate to an accountability group – and a six figure business income.