Since starting my business, I have had numerous female colleagues and friends seek my advice for starting their own companies. Whether they are looking to open a consulting firm or make and sell a product through a retail business, it seems that most concerns are the same: “I know how to do my job; I know my stuff. But, it’s the financial and accounting side of the business that scares me, and I have no idea where to start.”
Here are a few financial tips that have helped me along the way:
- Have insurance. Insurance is something many people take for granted when they are working for someone else. And I’m not just talking about health insurance. Disability, life and liability insurance are also critical for business owners, especially women who are supporting themselves or their families with their business income. Not having insurance could be devastating for you, your business and your family. Find an independent insurance agent you trust, and let them help you sort through shopping for policies and making sure you have all of the coverage you need.
- Know what kinds of loans/lines of credit are available to you. As a new business owner, you have options when it comes to borrowing money. It’s essential that you know the difference between a business loan and a line of credit. Loans should always be used to acquire some kind of asset, such as a piece of equipment or company vehicle. A business line of credit is a financial instrument typically used for an organization’s short-term working capital needs, such as inventory purchases, future project costs or company payroll. Again, find a financial institution you can trust who can help you navigate this lending maze. Learn more about the differences in lending products by visiting Telhio Credit Union.
- Be organized with your finances. It’s important to fully grasp your financial climate. Purchase good financial software and be diligent when it comes to your administrative financial work every month. Track your mileage every day, log it every month and keep all of your receipts. Reconcile both your bank and credit card statements, and always keep your business and your personal bank accounts separated.
- Turn your CPA into your business partner. Having a trusted CPA is crucial to the success of your business. Work with them to keep your taxes up-to-date and ask them to show you how to correctly use your financial software. Plan to have quarterly check-ins with them. If you use QuickBooks or other such software, you can also email your advisor a copy so they can check to see that you are filling in your financials correctly− hassle free!
- Plan for retirement. All the retirement options available today can be confusing. Between the different types of IRAs or SEPs, and knowing when and how much to set aside, retirement planning can seem more daunting than it is. Remember that you have options! Talk with a financial advisor who can help you through the process of choosing what plan is right for you and your business. Telhio Credit Union also has great tools and resources for retirement planning available on its website, or you can talk to a member of the investment team by calling 614-221-3233, ext. 8105.
The financial aspects of running a business might not be the part that you love the most, but it can be less intimidating and daunting if you stay organized and surround yourself with trusted financial advisors. That way, you can focus on what you know and do best.
Telhio Credit Union is open to everyone who lives, works, worships or attends school within Franklin County and surrounding communities. Founded in 1934, originally as the credit union for the Columbus Telephone Co., Telhio is a not-for-profit financial cooperative where its members are also its owners. Driven by its philosophy that members come first, Telhio is committed to the highest standards of responsibility and conduct.
Telhio offers a variety of innovative programs, services and products to support its members’ financial needs. Telhio offers seven branching offices throughout central Ohio and nearly 4,000 shared branching locations nationwide. Additionally, Telhio participates in the highest level of combined federal and private share savings insurance available, insuring deposit accounts up to $500,000.*
* Federally insured by NCUA. Additional coverage up to $250,000 provided by Excess Share Insurance Corporation, a licensed insurance company.