Financial tips for setting up your own business

When getting your new business off the ground, there are a range of financial tips and tricks which can be incredibly useful to know. This can allow you to successfully position for business from the get-go to avoid some common financial pitfalls which can hold back new businesses. If you’re looking to set up a business soon then read on for some essential financial know-how.

Separate your business and personal finances

You’ll want to ensure your personal finances are kept completely distinct from your business finances from day one. If you’re using some of your savings to finance getting your business started, establish a set amount you will be using and move this across to a business account.

If you don’t, you could end up dipping into your personal finances to prop up your business which can lead to complications. It could affect relationships with family, your repayments on a mortgage or vehicle, general daily expenses – it’s much better to keep them separate from the start.

Establish your business as a limited company

When registering your business during setup, make sure you’re going forward as a limited company. This is another step towards keeping your personal and business finances distinct from each other.

As a limited company, any debts acquired by your business can only be claimed against the business rather than you personally. This is known as ‘limited liability’ which means that your business is a separate legal entity from the owner. It can add a level of protection for your personal assets when owning your own business.

Search out strategic thinking

If you manage to find relatively immediate success with your business, you may have some large financial decisions or proposals to make. For many business owners early on in their journey, they may feel they need external insights in order to make the right call for their business.

It’s important that you feel you have the support for your business in place. Getting in contact with strategic financial advisors can provide you with the best information and guidance, based on extensive research and industry knowledge. While you can attempt to research things yourself, trying to do complicated business financials without expert assistance can mean taking unnecessary risks.

Invest in an online presence

When starting your business from square one, getting noticed is half the battle. You may already have existing clients or customers which you have previous connection with, but finding new audiences is just as important.

Leveraging social media advertising will allow you to get the word out about your business, while setting up some form of website will give interested parties a place to contact you easily and find out more. Coming up with some initial branding can help you stand out against the crowd, while targeted advertising can allow you to speak to the right demographics.

Protect yourself with business insurance

Taking out business insurance gives you some financial protection if your business operations go awry, including cover for your premises, public liability, employers’ liability, and professional indemnity insurance.

For small businesses just getting going, the financial implications of something going wrong without this sort of protection can be severe. The unexpected happens all the time in life, so ensuring you have some form of support to combat these surprises is a must.

If you take these five points into consideration when you’re setting up your business, your finances will be in a better position to capitalise on success and mitigate difficult circumstances. Be sure to think through your decisions early on and use the tools at your disposal to generate interest in your business – without a presence online, you could potentially lose out on a large number of customers.

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