August focus: Domestic Cleaning Service
Open Two Separate Bank Accounts
Initially you will have to balance your earnings so that your fixed business expenses and your living expenses are covered before anything else. You should allocate these appropriately, making sure that you maintain the payment of your business expenses above and before other expenses.
There are articles yet to come that specifically deal with budgeting. If you follow the advice written in them, you will be able to keep some order in your financial dealings, and you will also begin to make provisions for wealth creation.
OPEN A BUSINESS ACCOUNT: You must bank everything you earn from work into this account. From this account you will pay all business expenses, & draw a wage. Don’t pay personal bills from this account.
OPEN A PERSONAL ACCOUNT: Draw enough money to cover your fixed living expenses, plus a small amount of spending money, and also a regular amount to commence a savings plan. Once your business is earning enough to cover all fixed expenses, it is a good idea to put yourself on a commission basis to earn over and above the amount you have decided to withdraw. Pay all personal bills from your personal account.
Set up an Accurate and Effective Bookkeeping System
It is very important that you keep honest and accurate records of all your earnings, both those of your own efforts and also those of the people who may work for you. If you haven’t yet learned about legal alternative ways to operate your income-earning strategies from (such as being a member of a private foundation), and if you haven’t legally exited the taxation system, then the Taxation Department requires you to show accurate records, and when you acquire for yourself an informed understanding of the Taxation laws you will be able to work within these laws to your own benefit. Also, in order to make your business a saleable commodity further down the track, the accuracy of your record keeping will determine the price of your business when you wish to sell.
If you are still a member of the tax paying community, you will also need a competent Accountant and Solicitor. However, for the basics you should refer regularly to your weekly budget and your bank statements, and draw up Profit and Loss statements to help to see how you are going.
Registration of Business
If you intend to sell your business at a later stage, you will need to register your business with the Department of Fair Trading, or the appropriate department for the country that you are living in if you are reading this article from a country overseas (other than Australia). If you have chosen a name for your business and it is already being used by another business, you can place your own name in front of the name you wish to register in order to be able to use that name eg: John’s Lawn Mowing. This name is also being used by Jim – Jim’s Mowing – so John would have to place his name in front of Lawn Mowing.
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You can read in next article about: Follow-up Program