Business Money, Personal Money – Keep Them Apart!
You are a business owner, and your business is your only source of income. It is not surprising if you have only one bank account and manage all your expenses from that account – be it business or personal. Of course, it is easier to do it this way – after all you spend most of your time in your business. The problem is you are forgetting that your needs is quite different from your business needs and should be managed differently. Let me put it this way – if you want your business to grow, it needs to
Managing Fluctuating Revenue – Building Financial Resilience
Fluctuating revenue is common, especially in hospitality. The key to managing cash flow is mastering profit distribution.Key Expenses to Consider: Business Costs – List all fixed monthly expenses required to run your business. Growth Goals – Set SMART goals and allocate a monthly amount towards business growth. Personal Budget – Estimate your monthly needs, factoring in both fixed and variable expenses. A benchmark could be the market salary for a similar role.How to Manage Profits Efficiently: At the
Building a Strong Cash Reserve for Your UK Business
We often hear about emergency funds for personal finances, but what about for your business? A cash reserve is a crucial financial safety net, protecting your business from unexpected downturns. Here’s why you need one:Sole traders – If you plan a long holiday or go on parental leave, your income could drop. A reserve ensures you can cover fixed costs.Startups – Business profits often fluctuate in the first few years. A cash reserve helps during slower months.Product-based businesses – Machine breakdowns,
Give Your Profits a Purpose with SMART Goals
There’s no point in setting money aside without a clear plan. Many business owners withdraw profits as needed, but this lack of structure hinders both business growth and financial security. Your net profits should be distributed into four key areas:Fixed costs for the next monthEmergency fundReinvestment/Growth goalsBusiness owner’s drawings Reinvesting in your business is essential for growth—whether it’s buying assets, upskilling, or expanding operations. ‘SMART goal setting’ is a tool which will
Cash Flow Secrets: Stay in Control of Your Business Money!
Recording transactions in real time is a great start, but is it enough to manage your business finances? The truth is, businesses have multiple cash inflows and outflows every month. Without understanding the outcome of these transactions, you could be making decisions in the dark. A cash flow statement is the best way to visualize your money movement. It helps track: ? Revenue & inflows ? Variable & fixed costs ? Profitability trends The good news? You don’t need a complicated system—you can
Recording Business Transactions: Track Your Finances Like a Pro
As a business owner, tracking your cash inflows and outflows is key to staying on top of your finances. While your bank app records transactions, manually tracking them in real time has added benefits:Categorize expenses properlyVisually note outflows as they happenCompare spending with your set limits The goal? To be more mindful of your business expenses. Use a simple, free smartphone app—not complex accounting software—to log only non-direct debit expenses. Set an upper limit for spending and keep it
Smart Expense Hacks every Business Owners must Know
Hidden expenses can eat into your profits without you realising. To take control of your business finances, follow the ASK method: 1. A – Assess Necessity: Is this expense essential? Can you measure the benefits it brings to your business? 2. S – Scrutinise Value for money: Are you getting the best return for the money spent, or is there a better way to achieve the same outcome? 3. K – Keep an Eye on Alternatives: Can you switch providers, find a more affordable plan, or explore innovative
Business Income - Basics for Business Owners
As a small business owner or start-up founder in the UK, understanding basic financial principles is essential for managing expenses, setting goals, and ensuring business growth.Do You Need to Be an Accountant? No, but understanding how money flows in and out of your business helps you make smarter decisions and achieve long-term success.What Is Business Income? Income in business isn’t just sales or profit—it has several layers:Sales/Revenue (after VAT)(-) Variable Costs (e.g. materials, direct
How to ensure your business thrives in its initial years?
How to ensure your business thrives in its initial years? Starting your first year in business can be both exciting and overwhelming. You might be expecting to make profits within a couple of months. While it's great to be ambitious, the money game teaches us the importance of being realistic. You might achieve profitability quickly, or it might take longer. But what about your expenses until that time?Understanding Business Expenses A business typically incurs two types of expenses:1. Variable Costs –