Many professionals who made the choice to work on their own–either through an owner/operator business such as a semi-truck driver or as a freelancer–know all too well about the highs and lows of their monthly earnings. As unpredictable as independent income can be, there are ways to guarantee that you have money not only to cover your expenses but, also to enjoy a comfortable life.
Bringing in the Money
When you own your own business you are responsible for everything. This means that you and you alone must find clients, pay for your business expenses and collect the monies owed when they come due. The latter can become difficult, especially when you need it to afford other necessary supplies to keep your business solvent. You can wind up spending many hours on bookkeeping alone–many hours that are better spent on soliciting new business. Alternatively, you can choose to have an outside company like TBS Factoring collect the funds owed to you. These companies not only have a large success rate of getting your monies owed but, in the meantime, they also have financing set up for those times of emergency wherein without the capital you would not be able to continue your business operations as usual.
Establishing a Budget
The key to your success depends on several factors. First, you need customers. Once you have a steady stream of work you need to establish a monthly budget to include all the expenses associated with operating your business, as well as your household expenses. Once you have that figure you’ll know how much you need on hand each month to cover all of your bills. Whether you are an independent owner of a business or a freelancer you must make a deposit at the beginning of each month in the amount you need. While you may get tempted to retain a lot of the profits after a highly lucrative month, showing restraint is essential to your survival.
Pay You a Salary Each Month
One of the hardest parts of being in business for yourself is the uncertainty of your income. After all, you left a job where you received a set amount each week that you could count on. Luckily, there is a way to earn a set salary each month that you can rely on and still enjoy the flexibility of working for yourself. By paying yourself at the beginning of each month, the same way you make the previously mentioned deposit into your checking to cover your bills; you will have your own money. At the end of each year if you have a substantial amount in your business’s savings you can also give yourself a year-end bonus.
Opening a Savings Account
Irregular income can make it difficult to acquire a loan due to the uncertainty of your income each month. This is why you need to establish a savings account and tuck away everything extra after you make your monthly deposit and cover your living expenses. This money will guarantee that you have the next month’s bills in reserve, as well as your salary. This system helps to even out the low income and the lucrative months so that you, in essence, don’t feel the pinch.
Owning your own business or working as a freelancer gives you the freedom to create your own clients, work your own hours and vacation with your family when it suits you. While you will have months that turn a high profit and others that are less than desirable, you won’t skip a beat if you use your money wisely.