Keeping Your Money Straight: Tips for Solo Business Owners

I have a dear friend who is one of
those rare combinations of brilliant and generous AND in the same line
of work as I am (lucky, lucky me!).  Every time Lisa makes a
recommendation I take note and immediately install it in my life. 

One of the first things she told me when I moved from agency work to a private practice was, "Open
a separate checking account with a linked savings account for your
business expenses and income.  Every time you get a paycheck put one
third into the savings account at the same time that you deposit two
thirds into checking.  Don't touch the savings account until tax time
and you will always have enough money to pay your taxes
." 

Because you do this with your pre-expense money, you will not have to
sweat the federal, state, and city taxes (unfortunately you do still
have to do the paperwork for them, and that still stinks). 

Another great tip was this: "get a zippered plastic bag for your purse and stash all of your business related receipts in it so you do not lose them." 
After coping for months with finding receipts in my wallet, check book,
day planner, and car glove compartment and losing several more than I'd
care to admit, I bought mine at Storables for a dollar fifty.  Viola! 
Problem solved. 

And here are a few tips of my own devise:  Keep record of your income in at least two locations
As a therapist, I keep dated client files in a locked cabinet at work
and a record of client appointments in a day planner on my person.  If
something happens in one location I have back up data in another. 

Track your "smart money."  Keep scrupulous tabs on
where your clients hear about you and if you are spending money on
marketing/advertising without results for x months in a row
(find out from colleagues what the industry standard is in your field),
drop that expense as a dud and port that money and time over into
something that works. 

Send thank you notes to your referral sources.  This
seems like such a no-duh thing, but it seems that in this busy age we
sometimes let manners fall by the wayside.  Sending a hand written thank
you note to someone who has sent you business shows gratitude and
gratitude shows class.  That's worth banking on! 

Plan for seasonal cycles.  In most fields there are
times of year where your business-and your income– are at their most
active, and times when you get to relax and catch up on your outside
interests.  Base your spending patterns at the mid point of your income
fluctuation so you remain clam and flush even when your phone is not
ringing with new clientele. 

Invest in you.  Work-related classes, books,
workshops and the like are not only wonderful (and tax deductible) ways
to sharpen your skills and keep your enthusiasm for your profession
high, they are opportunities to make contacts with a wide variety of
people who become…referral sources!  For most entrepreneurs, we are
the instrument of our work.  Keep yourself good and shiny! 

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