Are your business finances healthy?
As an online business owner, you know that money matters. It's the lifeblood of your business, and without it, you won't survive for long. That's why you need to keep a close eye on your financial zone - the area of your business that deals with money. Managing the financial zone of your online business can be challenging, but it's essential to keep it healthy if you want your business to thrive.
Here are 5 questions you need to ask yourself (and take action on when necessary) to make sure your financial zone stays on track:
Am I making a profit?
This is the million-dollar question, right? As an online business owner, you need to track your revenue and expenses carefully to make sure you're making a profit. You need to keep track of your revenue from sales and subtract any expenses, such as website hosting fees, payment processing fees, and materials costs. (You’ve probably been told many times that you need to do this, but I want you to take a moment and think about how effectively you are tracking these numbers.) If you're not making a profit, you might need to adjust your prices, find new suppliers for your materials, or migrate to cheaper software tools.
Do I know where my money is going every month?
It's essential to keep track of your expenses as an online business owner. You need to know where your money is going every month so you can identify areas where you can cut back on expenses. For example, if you run a social media management business, you might be spending a lot of money on software tools to help you manage your clients' social media accounts. By tracking your expenses, you can identify which tools are essential and which ones you can do without.
Do I have the correct business type for my income?
Choosing the right business type is crucial for online business owners. For example, if you're just starting out, you might be operating as a sole proprietorship. However, as your business grows, it might make more sense to register as an LLC or S-corporation to take advantage of tax benefits. For example, if you run a freelance writing business and make a significant income, you might want to consider forming an LLC to protect your personal assets.
Do I need to legally protect my intellectual property?
If you're selling products or services online, you may need to register a trademark or copyright for your materials to prevent others from copying them. This can also give you legal recourse if someone does infringe on your intellectual property.
Do I need to increase my savings?
As an online business owner, you never know when unexpected expenses might come up. That's why it's essential to have an emergency fund. For example, if you run an online store, your website might go down unexpectedly, and you might need to pay a developer to fix it. Having an emergency fund can help you cover these unexpected expenses without affecting your business's day-to-day operations.
If you're feeling overwhelmed or unsure about any of the above points, I'm here to help. As a director of operations for online business owners, I have years of experience in helping businesses keep their financial zone healthy. Whether you need help with tracking expenses, choosing the right business type, or simply reviewing your numbers, I can guide you through the process and help you make informed decisions for your business.
So, don't hesitate to book a consultation with me today if you need help with managing the financial zone of your online business. Together, we can ensure that your business stays healthy and profitable for years to come.
