Episode 09: Getting Your Business Finances In Order
This is an information-heavy episode covering how to calculate what your business should make based on your personal financial needs. Start by listing all your personal expenses like rent and utilities, then add 20% – that's a starting point for the amount you need each month. To find your business revenue goal to support that, double that number. That covers owner pay, business expenses, and 20–30% saved for retirement and taxes; adjust as needed. As for “profit first,” on paper it sounds great, but in reality it's much easier to mess up when trying to do it yourself, and most new businesses aren't making enough profit to support the extra transactions the system requires. One checking account, one savings account, and one credit card is usually enough for a business getting started. Consider what bills can go on autopay and whether traditional budgeting works for you.
Key Takeaways
Personal expenses plus a buffer is a starting point for calculating a business revenue goal.
A simple structure – one checking account, one savings account, one credit card – is often enough when starting out.
The “profit first” system can be easy to mess up without enough profit margin to support it.
Automating bills where possible simplifies financial management.
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DISCLAIMER: This Podcast may receive compensation for promoting or recommending products or services through affiliate links. We only recommend products and services that we believe are of value to our listeners. The content provided in this podcast is for informational purposes only and does not constitute professional financial, accounting, or legal advice. Listeners are advised to consult with qualified professionals before making any financial decisions. The Freelance CFO is not responsible for any actions taken based on the information provided.
Music credit: Neon Fairies by Wolves
Note: This episode is from our previous podcast, Confident Money.
