Starting Your Own Business? Roy Gagaza Shares What You Need to Know About Income Planning
If you’re starting your own business, you must develop a plan for your income, especially if you’re not continuing to work for an employer while you get your business up and running. Here, Roy Gagaza shares what you need to know about personal income planning when starting as an entrepreneur.
Set Up a Year One Plan
It’s important to be realistic about what you can expect to make from your business in the first year (and to keep in mind that many businesses lose money in the first year). Setting aside at least a year of living expenses can help you plan for the worst, according to Roy Y. Gagaza. After the first three months of your business, you can take stock of your income and adjust the plan as necessary.
Arrange Financing–And Have a Backup Plan
As a business owner, you know you have reliable financing–but it’s important to have a backup plan. Don’t forget that you’ll need to save some extra money to keep things afloat if one of the parties financing your business has a change of heart. Putting some of your first-year income into an account for emergencies can help save your business if things take an unexpected turn.
Work With a Financial Professional
You know the ins and outs of your industry–but if you don’t have a background in finance, it’s a smart idea to chat with a financial professional before you start opening a business. From taxes to paying yourself to cover your insurance, your financial professional can work with you to ensure you’ve checked all the boxes when creating a solid income plan for the first year of your business.
Check In Regularly
It can be easy to let the books slide when you’re working on getting the word out about the goods and services you offer. Schedule a time to check in once a week and see your finances. While it’s normal to have good and not-so-good weeks (especially when your business is just starting), you’ll want to watch for overall trends. If necessary, revisit your income planning documents so that you can make adjustments that make sense with the fluctuation of your business.