"What's for dinner tonight, Mom?"
"Joe Smith's account on the grill and Sheila Jones' smothered with butter and a sprinkling of paprika."
"Sounds great!"
We often to refer to our meals as the account we land, but if for some home businesses, families can literally eat the profits Those who cannot manage their home businesses well often find themselves wondering where the profits went, and will over look the eight-dollar t-bone staring them in the face. How can home businesses keep from eating their profits.
First and foremost, the home business owner must keep his business funds separate from his home funds. He must establish a separate checking account altogether. "But that's too much work!" some whine.
Tough. Deal with it. When you absorb your business expenses and income into your home checking account, you manage your business finances poorly. You have no way of determining what your profit is if you're making a profit at all. So first and foremost, establish a separate account where you will deposit all business income and from where you will pay all business expenses.
Pay yourself from this business account. However, do not empty the account to pay yourself. If you do this, you are your most expensive employee, and you should fire yourself or shut down the business. When you pay yourself, do not take home the full hundred percent of the paycheck. Instead, deduct 25 percent of the paycheck and set it aside in a separate account, like a savings account, for taxes. Those who neglect to set money aside for taxes often do not have taxes. Plan for taxes. They should surprise no one when they roll around every quarter.
Learn to live and work within your means. The basic concept of money management lies on the principle that one never spends more than he earns. Figure out an estimated monthly income, and then spend that income on paper before you let the dollar bills slip through your fingers.
This means at home writing down all of your expenses, including anticipated expenses such as dentist bills, gifts, and car repairs. When you have the expenses and savings amounts written down, they should equal your take home pay. If they do not, adjust them so that they do, and learn to live within that budget. Then do the same at work. Learn to operate your business within the framework of your written budget. If you need someone to be accountable to, consider hiring an accountant that can help you with the budgeting process or recruit a friend that will go through the numbers with you.
Those who learn to manage their money wisely, both at home and with their home business, will always find themselves on top. No longer will you be eating Joe Smith's account on the grill or Sheila Jones' smothered with butter and sprinkled with paprika. Instead, you will find yourself savoring the profits that you know you have.
http://www.money-trial4you.com/pips/html
Post je objavljen 28.06.2007. u 10:51 sati.