A lot can change in a year. For instance, I started 2018 feeling like a complete failure. After scaling my business to six figures in 2016, revenue tanked in 2017 while expenses skyrocketed. As a personal finance writer, how could I struggle so much with my own business finances? The truth is, small business money management brings unique challenges beyond personal finance basics. I've since course-corrected and ended 2018 on track to exceed $250,000 in revenue.
Here are the key lessons I learned along the way.
- Business income isn't personal income.
A $250,000 turnover might seem like plenty, but it's not take-home pay. As your business grows, set a regular salary to cover your lifestyle and build your financial foundation. With taxes aside, you'll know exactly what you can reinvest. - You're your own HR department.
Running a solo business means handling everything—from client services to accounting and HR. Mastering these operations is essential for long-term growth and sustainability. - Build a business emergency fund.
Just like personal finance recommends 3-6 months of expenses, your business needs a cash buffer for surprises, delayed payments, or unexpected costs. - Cash flow is king.
Billed thousands mean nothing if they're not in your account when bills are due. I've stabilized mine with smaller, consistent income streams as a base, freeing me to pursue bigger wins.
Related: 4 ways to create financial security without salary certainty - You can always earn more.
Don't cap your potential—review revenue streams regularly and pivot offerings or markets to maximize earnings.
Related: 5 things I learned about being a solopreneur
This article originally appeared in the Spring 2019 issue of LadiesBelle I/O magazine.
