What's a good strategy to help 'solopreneurs'?
- January 4, 2010 - 10:06 AM
Q Do you have a good source or strategy to help ''solopreneurs'' (one-person firms) with budgeting and managing money for their business?
A The answer to this question to some degree depends on the complexity of your business. If you are relatively small with few customers and suppliers, you can design a fairly effective spreadsheet system in Excel. However, if you have many customers that you are continuously billing and then collecting from, and/or many suppliers that you buy from, then it might be wise to invest in a program like QuickBooks that automates some of the process.
If you decide to invest in software, there are many programs available and with some research you should be able to find an inexpensive system to meet your needs. The system you design or purchase should be able to help you accomplish a few key tasks:
Anticipate cash flow: To properly budget, your system should be able to efficiently predict the timing of cash inflows and outflows. This will be partly based on the customers you have lined up, anticipation of additional customers, when you incur costs associated with those customers and when you receive payments from those customers. It will also include when ongoing operating expenses are incurred, when equipment expenditures will be made and when sales and income tax payments are due.
Keep accurate records: One of the last things you want to find yourself doing is questioning whether you have sent out an invoice, received a check from a customer or paid a supplier, as this leads to potentially costly or embarrassing outcomes. Accurate records will also save you time and money when tax season rolls around.
Manage your time: As a one-person firm, you will likely spend more time tracking finances than you would like. So the system you use should be efficient in projecting cash, recording expenses, producing documents and allowing you to see what bills are due and what customers you need to follow up with. The less time you spend deciphering bills and recording expenses, the more time you can spend working on your business.
OF ENTREPRENEURSHIP, UNIVERSITY OF ST. THOMAS
OPUS COLLEGE OF BUSINESS
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