Tips for not getting caught out financially when you run a trades business
When you’re running a business it can be easy to get caught up in the day to day. There’s often no time to spare and it can be difficult to understand why all that busy-ness isn’t translating into money in the bank. So, here’s a little bit of food for thought around why that might be the case and what you can do to make the situation better.
Look after number one
You may be surprised to hear this but it is very important to pay yourself first! I learnt this a long time ago from one of my mentors, Roger Hamilton. Without you, there is no business so make sure to take care of number one! However, this doesn’t mean dipping in and out all the time and taking money whenever you feel like it. Plan how much you can pay yourself each month and do it on a set day of the month. Pay it from your business account into your personal account and then don’t dip into the business account.
Don’t forget your obligations
It is good practice to have a separate bank account set up for tax and to put money into this each month for VAT and Corporation tax. If you are using accounting software you will be able to run a year to date profit and loss report. And you should always have 19% of the net profit put aside for Corporation tax in your separate tax account together with your VAT. Once again accounting software can give you your VAT liability at the click of a button.
If this information strikes a chord with you then there are lots more top tips and practical advice in my book ‘Build and Grow – How to go from Tradesperson to Managing Director in the Construction and Trade Industries’ And you can buy it from Amazon via this link http://amzn.to/2CBok2L.