How I Set Up My Business Bank Accounts
Have you ever found yourself struggling to make ends meet, despite having a successful business? As a savvy entrepreneur, you know that taking home the profits should be your top priority. But all too often, money gets tied up in expenses, vendors, and unexpected costs.
That's where the Profit First method comes in. By taking a disciplined approach to managing your cash flow, you can ensure that you're always paying yourself first and setting your business up for long-term success.
But how do you set up your business bank account to make this happen? Here's my step-by-step breakdown:
Open Multiple Accounts to Help Run Your Business (Similar if you were to use the Barefoot Investor Method for your Personal Finances)
The Profit First method involves dividing your income into different accounts, based on predetermined percentages. I recommend starting with a minimum of four accounts:
Income Account - This is where all revenue from your business will flow into.
Owner's Pay Account - This is where you'll transfer the percentage of income that's earmarked for paying yourself.
Tax Account - Set aside a percentage of income here to ensure that you're always prepared for tax season.
Operating Expenses Account - Finally, use this account to then manage all your operating expenses such as marketing, systems, cost of goods and other expenses that you use to run the business.
Profit First by Mike Michalowicz
How to create a profitable business by focusing on your profits first
Profit First is a revolutionary new way to manage your finances. In his book, Mike Michalowicz argues that the traditional way of budgeting is backwards. Instead of starting with your expenses and then trying to make a profit, Michalowicz suggests starting with your profits and then allocating the rest of your money to your expenses.
MAIN TEACHINGS:
Start with your profits and then allocate the rest of your money to your expenses.
Use the Profit First system to improve your cash flow.
Build a profitable business.
WHO IS THIS BOOK FOR?
This book is for business owners who want to learn how to use the Profit First system to improve their cash flow and profitability.
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Running a business can be challenging, but it's also incredibly rewarding. If you're a female entrepreneur who wants to grow your business, I encourage you to read one of the books on this list.
These books can help you learn from the experiences of others, gain new insights, and develop new skills. With hard work and dedication, you can achieve your goals and build a successful business!
