— June 21, 2019
As a solopreneur, a lot can fall on your plate. You’re likely in charge of finding customers and clients, doing the work, and managing all operations. Since you’re essentially running a small business by yourself, it’s important to find the best ways to automate and implement strategic systems you can lighten your burden.
Something all solopreneurs have to worry about is operating expenses. You need to pay for certain systems and tools to help your business run smoothly. However, keeping up with invoices and paying them on time can be a hassle.
Here are some of the best strategies to help solopreneurs pay for operating expenses easily.
Keep Personal and Business Finances Separate
Before you can even prepare to pay for operating expenses, you need to determine how you’ll budget for these costs. As soon as you start making money with your business, it’s best that you start keeping personal and business finances separate.
You don’t want to combine the two because you may fall short on either end. No solopreneur wants to realize that they can’t afford their living expenses or that they have to cancel an important subscription service for their business.
Luckily, separating finances is easy. You’ll need to open a business checking account and create a budget for your business expenses so you know how much to deposit each month.
Once you have a clear budget in place for business expenses, it makes sense to set up automatic payments. Automatic payments are essential if you have multiple expenses that are due on various days throughout the month.
It’s easy to get confused or simply forget a payment. Some companies will simply allow you to sign up for autopay through your business checking account. Other times, you can set up a subscription through your online payment platform. Opt to receive reminders when certain payments are coming up so you can prepare your business finances in advance.
Make Annual Payments
Most small business services may allow you to make annual payments so you won’t have to worry about keeping up with monthly payments. Some companies will even offer you a discounted price if you pay annually.
If you can afford to pay upfront, it’s often a good idea since you will save money and spend less time budgeting and tracking expenses.
Keep Money in Reserves
We all know that your income will fluctuate as a business owner. However, your bills will be due regardless of whether you have an amazing month or a really low income month.
To help offset the potential of having a variable income and it affecting your ability to pay for operating costs easily, start building up some cash reserves for your business.
Add up all your operating expenses from the business budget you created. Then, start saving a business emergency fund so you can cover several months of expenses. You may not need to touch your reserves that much, but it will be there when you need it so you can keep paying your operating costs on-time.
Being able to pay for operating expenses easily is unfortunately not something most solopreneurs think about early on. You will have certain expenses to pay in order to keep your business running. So you might as well start budgeting for these costs and using the tools and strategies mentioned above to cover your most important business expenses with ease.