Columbia, S.C. (WLTX) - Columbia celebrated Small Business Week last week and many people have been bitten by the business owner bug. As you gear up to turn your great idea into a viable business, here are some money tips to adhere to when you're starting your entrepreneurial journey:
• Build Up Cash Reserves - Starting a business is a risky and you want to prepare your personal finances for the possible variance in your income by saving a year's worth of monthly living expenses.
• Keep Your Personal and Business finances separate - Whether you're a sole proprietor, a partner in a business, or a freelancer/independent contractor, be sure to separate your personal finances from business finances. It saves you the trouble of determining a paper trail for the IRS.
• Talk To Your Financial Advisor - Your advisor may have a plan to adjust your investing plan in regards to your new business venture. As stated earlier, you're increasing your risk and a strong investing strategy takes into account your risk tolerance.
• Utilize independent contractors before hiring employees - Independent contractors work on a per-project basis. Working with freelancers and independent contractors gives you the opportunity to budget for their services and save money before hiring and employee for your business.
Building a business is difficult, but following these financial tips will help you organize your finances and focus your energy on your new venture. What are other things we should address in our personal finances before starting a business? Tweet us @WLTX and @KnowMoneyInc