Starting your own business can feel like you’re in a pressure cooker and constantly worried about when the next dollar will land in your bank account.
But there are some basic steps you can take from the start to keep your finances in order and make the whole process less daunting.
Rachel Service recently celebrated the sixth anniversary of starting Happiness Concierge, which helps large organisations improve their workplace culture.
She was still working shifts in a cafe when she started and recommends new business owners also pick up a side job, as it reduced financial pressure and helped add some structure to her week.
“Quite a few entrepreneurs who go from a full-time job to no structure find it overwhelming and they end up going back to a job,” she said.
“If you can find a part-time job, leave your ego at the door – be willing to do anything from making coffee, washing dishes to doing behind-the-scenes work – be grateful that you can be fully present in your part-time job and as a result be fully present … with your business.”
Ms Service didn’t have a financial plan when she started but kept one-third of her income in a separate account and hired a bookkeeper.
“I made sure that I asked for financial advice from people who had already built what I was wanting to build,” she said.
Ms Service advised other small business owners to do their tax every year, rather than letting it pile up for several years like she did when she started.
“I had this big scary box of receipts hidden under my bed,” she said.
Leaving the back end of your business in disarray subconsciously affects how you present to clients, and Ms Service was much more confident selling her services once she sorted out her tax and systems.
Ms Service said separating her business bank account from her personal bank account was another game changer.
“That helped me make a huge mental shift from thinking of my business as a fun hobby or a side project to a serious business.”
Reece Miller founded disability support provider Support Your Way in 2017 with friend Luke David. The company now employs about 70 people.
Mr Miller said the business has four bank accounts, covering tax and legal costs, operating expenses, savings to invest back into the business, and payroll.
He said his best advice to new business owners is to keep overhead costs low and to use as many free resources as possible.
“Try and get as much free stuff, as much free software and as many free templates as you can get,” he said.
“Starting it as lean as you can was a really, really big thing for us.
“Launching yourself into $20,000 to $30,000 of debt puts you under a lot more pressure, whereas it was a lot easier to just enjoy work and get out there and find work as well when we weren’t in debt.”