Your Own Business: The Financial Side

Money is stress. Well, for most of us it is, or to be precise, those that don’t have it. We will struggle with our finances most of our lives, and we will feel the pinch of being poor however we look at our situation, and one of those situations is when we make the change from being employed to being self-employed, or going into business for yourself. It is a given that when you first make the tentative leap to being a freelancer or going into business with a partner or as a sole trader, the first 6 to 12 months are hard, financially or emotionally. Here is what to expect…

You will be operating without a safety net… and this is a lot for people to get their heads around, especially when making the transition from a job with security and a pension. Financially speaking, you need to plan ahead for the times where work may be dry, or you may not be making much profit. A lot of people making that change can feel vastly put-off by the notion of earning hand to mouth. And while the pay can be low, there will be times that you earn more money than normal in the space of a month. It is impossible to predict your pay in this situation, not until your company or line of work starts to even out and you know how much you will earn at the bare minimum each month. Things like pension plans are easy to put off, and people have that “we’ll cross that bridge when we come to it” attitude. But what about if you are unable to work due to injury? Do you have people that depend on you to earn an income? If so, then you need to find a system whereby you can put some money aside for an unplanned event.

You will learn a lot…  about everything! You will learn how to do your taxes properly (well, to the best of your ability) and you will learn about what you are really capable of. By going self-employed you are, in essence, wearing many hats. You will devise a system of keeping track of business expenses, and you will work many late nights to balance the books and chase payments, possibly while juggling work as a full-time parent! You will learn a lot from your mistakes. For those that freelance, make sure that you set up a business account in your name, it is easier to keep track of work finances against the outgoings from your personal spending. When it comes to doing your tax return, it is much easier to see a bank statement from one account that shows your business outgoings and expenses rather than having to cross-check everything from your personal bank account, which is time and effort you don’t have!  

You will have help from the unlikeliest sources… really! There are government advice lines and sites at your disposal, so you don’t need to feel like you are on your own in the process. A common mistake people make at the start of their self-employment is to not claim expenses, which is mainly a hangover from being employed. You are plowing a lot of your finances into making your business or freelance work profitable, and you shouldn’t have to pay tax on it. There are things like the Uniform Tax Rebate, that help people to claim back the costs of their work uniforms as well as their work tools, and a lot of people are unaware of what exactly they can claim on. This is why a lot of people have accountants to do their work, but if you are unable to afford one at this point in time, you can find help online, and you can claim on unexpected items. For example, if you work from a home office, you claim part of your utility bills for the energy used in that room, which, if you use a computer 12 hours a day, it can eat into your energy bill so having a portion of your electricity bill back will be a big help!

As more and more people choose the route of self-employment as a way to earn money, it is something that needs to be communicated, your finances are more important than ever, and you need to think long-term in how you look after yourself and your dependents. With careful planning and constant assessment of your outgoings, it will help you survive those first sticky months.

A Career Change Isn’t Rocket Science!

If you’re stuck in a rut at your work, it might be time for you to heavily consider changing your career. This doesn’t need to be the huge leap of faith that it is sometimes made out to be, but of course, you’ll be exchanging a pretty safe opportunity for a dream. It is a hard bargain.

However, it’s worth saying that nobody is ‘one and done’ with life. You’ll have plenty of opportunities to change roles and work in the field that you want to, in fact – you might even find that your dream job isn’t your dream job when you get into the role! It’s very important to not take it far too seriously. Humans do not naturally thrive under pressure, so don’t add any more to yourself. Once you think you’ve found your true calling it can be easy to add a lot of pressure – you desperately want to make it work, right?

It’s likely that you will change your career direction a lot during your working life – many people do – so simply take it one step at a time. There are plenty of resources out there that can help you not only identify the roles you’d want to work in, but exactly what skills you need to gain the role and excel in it. Think about the skills you are proficient at as well as the skill you will enjoy using. These will help you find specific job roles.

The next step? Training. Take all the pressure off of yourself and allow yourself to focus on what skills and experience you need to gain to get into the role you want to have.

Career changes take place in wide open stages, so your training will never really stop. Identifying areas you can improve in is a good idea as is getting feedback on your current development. The training you need will also vary. If you need to enhance your English skills, you might link up with a team like Effortless English Club who can help you improve your English skills for a job in the Western world. If you want to be an Architect you’ll have to study your craft on a./n academical basis to be qualified. It’s all about knowing exactly what you need to do to be able to find the training you need to boost your career prospects. If you’re lacking skills, you can find plenty of ways to improve via volunteer work and internships as well. Sometimes we can find it hard to find ways to improve. That’s ok, there are still ways we can focus our skills to take them to the next level, we just need to do more to dig deep and find opportunities to improve. If they aren’t freely available, it’s time to focus on a particular skillset that can be realistically improved in the meantime.

On a final note, a career change isn’t for everyone, so assess all the factors and reasoning behind your actions before jumping into a new line of work.

Occasions When You Need To Think Financially

There are certain times in life, rites of passage if you like, when it is essential that you think carefully about the financial side of things. No matter what your approach to money is during your ordinary daily life, these are special situations when paying attention to the financial aspect is likely to be an essentially good move for you to make. This might be because it will help to save you money in the long run, or it might just be that if you are not careful you will find yourself in some serious trouble. Whatever it is, it is good to know what those scenarios are, so that you can properly prepare yourself for them. Let’s take a look, and see what specifically you might need to consider.

Starting A Business

When you start a business, you need to be absolutely certain that you are in a strong enough financial position to be able to ensure its success. It is worth remembering the risks involved with starting a business, even if you are excited about its possible success. The truth is that half of all businesses fail within their first year. Almost always, this failure is financial-based, so it is clear that if you want to see your business succeed, you need to pay close attention to the financial side of things. This means finding a decent source of funding which you can rely on, budgeting your business well, and making sure that you are doing everything to bring in as much in the way of profit as you possibly can.

After A Car Accident

There is no doubt that your number one concern during a car accident will be the safety of everyone involved in the situation. However, once that is dealt with, and you are sure that everyone is safe, you will want to make sure that you are starting to think about your money as well. There are a fereasons why you might suffer financially here, and being prepared for them means that you can minimise the likelihood of that suffering happening. Most of all, you will probably want to lawyer up. When you do that, go for the ones you can trust, hire the attorneys voted Super Lawyers for 10 years straight. That way, you will feel much more secure in your finances. You should also make sure that you are properly insured at all times, as this too can have serious ongoing financial implications.

Selling Your Home

When it is time to move home, you definitely need to stop and think about what it means for your finances. No matter the size or age of the home you are moving into, it is likely to be essential that you think about the money you will need to get together. Mortgages are a huge concern here; make sure that you spend the appropriate amount of time shopping around so that you can end up with the best possible mortgage for your situation.