These factors make it even more critical that we develop financial consistency.  Keeping a handle on the ways of managing our money that are within our control, will go a long way towards building financial stability and avoiding the financial roller coaster that plagues many small business owners.

Following are 5 simple steps to becoming financially consistent:

1.  Pay Yourself First

This is the corner stone of any long term financial stability, let alone wealth. Every month, you should put a set percentage of your earnings into a high interest savings account, and then don’t touch it until you are ready to invest with that money.  This is not the “rainy day” account that you dip into when things get hard, nor is this the “splurge” account to get something special for yourself as a celebration. Money is only withdrawn from this account to buy assets with – an asset being defined in this case as something that either makes you money, or appreciates (increases) in value (so a new car would not be an asset under this definition!). Do this consistently and, over time, you will build up a very nice amount of cash to be investing with.

2.  Schedule Regular Money Days

“Money Days” are key to your success as a small business owner. This is simply a day that you set aside to work on your finances.  The jobs might include filing, entering receipts into a computer program, balancing bank statements, etc.  Now, it does not have to be a whole day, of course – unless your situation merits it… usually because you haven’t done one for a long time! Personally, I set aside a couple of hours every other week, and then a meeting with my accountant over the phone every couple of months. Doing this accomplishes several things: Your accounts will remain orderly, allowing you to continually track your financial progress and identify potential problems early on.  Money Days also allow you to focus on your finances for short, isolated periods, which frees up your time to think about and do other things… like growing your business.

3.  Forecast your spending

Forecasting is the process of allocating where your money will be spent. Visit http://www.AbundanceBoundSystem.com for tools specifically designed to help small business owners, network marketers and solo entrepreneurs determine exactly how they are currently spending. You’ll then decide which categories cannot change (rent, for example) and which ones can (groceries, entertainment etc).  You can then make strong, educated decisions about what amount you will CHOOSE to spend monthly in each category.  This tends to be far more empowering (and effective) than just blindly trying eliminate entire categories, That is the big difference between this process and traditional budgeting.  Budgeting encourages cutting out “frivolous” categories entirely and forgets the fact that we’re human!  You won’t stick to something long term that makes you feel deprived.  But as opposed to going to Starbucks every day, can you go every other day? Or order a Tall instead of a Venti?  Making these kinds of choices in several areas can make a huge difference to your overall spending.

4.  Keep business finances separate from personal

You must have separate bank accounts for your personal life and your small business.  Identify one credit card you will use for personal expenses and a different one to be used for business.  You would never see the CEO of Kinkos write a check for company expenses out of his personal account, and yet many small business owners do this all the time.  Separating your finances will allow you to clearly see what your business is spending and earning.  It will also legitimize all the tax deductions you are taking.

5.  Regular financial learning

Keep doing what you are doing right now! We take time to take business classes on marketing, using the internet, and creating products… but we expect our finances to somehow take care of themselves. Not only is this not realistic, it is dangerous, as we can make numerous serious mistakes blundering around while we try to find our financial way. The reason that most small businesses fail is because they are unable to financially sustain. Knowing this, doesn’t it make sense to put some time into financial education now, so that you have the skills to develop the financial stability that will keep your business around for the long term? Carve out some time for financial seminars. Learn how to manage your money as an entrepreneur and how to invest it so it can grow faster.  Learn the strategies to handle your business expenses, reduce your taxes, and create multiple sources of passive income.  It will be well worth it in the long run.

So there you have it.  Consistently doing these five things will significantly improve your financial picture over the coming months and years. Visit http://www.AbundanceBoundSystem.com to learn to incorporate each step into your daily and weekly life. It requires only a tiny time commitment of time, but the dividends from doing so will last forever.

Have Discipline – a wonderful aspect of being an entrepreneur is the freedom to create your own schedule. For the most part no one dictates when you have meetings or when you start and end your workday. However, for many entrepreneurs this freedom is also their curse as they struggle to develop the daily disciplines that lead to success in any small business.  We cannot imagine the Olympic runner pausing between laps to check his e-mail or agreeing to grab coffee with a friend in the middle of a scheduled training session. Likewise, as you plan the daily and weekly activities that will result in growth and business progress, block out concentrated work periods where nothing is allowed to interrupt.

Don’t Train on Your Own -  If 100 people were asked to name the single most important thing needed by every serious athlete, you could put money on the fact that the majority of responses would be a Coach. It would be unthinkable for any athlete wanting to reach elite levels to even consider training themselves. Additionally, most athletes spend the bulk of their training time working in groups – fueled by the natural support, energy and accountability that comes from a team. And yet, so many small business owners work completely on their own (thus the term SOLO entrepreneur) and wonder why they are struggling. At every stage of your business it is absolutely critical that you surround yourself with the individuals that will help you progress to the next level. This group should consist of both “experts” – those who have already accomplished the things you are working to achieve – AND fellow entrepreneurs who essentially make up your “training team.” No single person has every achieved great things on his or her own. Don’t fall into the trap of being a lone ranger – find the people who have gone before you and learn from their experience.

Take Breaks When you Need Them – This may seem to contradict our first paragraph about discipline, but in fact, a part of discipline is the creation of balance. Athletes train hard but they also take the breaks they need to allow their bodies to rest. Without these periods of recovery, injury and burnout become inevitable – taking them (sometimes permanently) out of the game. As an entrepreneur, you must also create the periods of downtime that will allow you to refuel. This allows you to return to your business with the renewed sense of energy and purpose that will keep you moving forward.

For step-by-step tools to financial success as a small business owner, visit http://www.AbundanceBoundSystem.com and register to join us for our next FREE teleseminar The Power of Prosperity.

Do you run your business like this?  If the answer is no, then you don’t actually have a business. You’re merely engaging in a hobby, and it may be an expensive one.  You might be saying, “But I’m not an accountant.”  True.  However, as challenging as it may seem initially, you can absolutely learn to keep proper track of your business finances. It is critical to your success as a small business owner.

The absolute most important thing to do is to separate all your personal income and expenses from your business income and expenses.  You would never see the CEO of a big company go out and buy printing supplies from his or her personal account and you shouldn’t do this either.  This means you need to have a separate bank account for your business.  If you don’t, then all your income and expenses are mixed together and it’s far harder to keep track of everything. (It is easiest for network marketers and other home based entrepreneurs to fall into this trap.)

Once you’ve established separate accounts, place any personal earnings (if you still have a “day job,” any financial gifts, alimony, etc.) in your personal account and put your business earnings in your business bank account.  Likewise, pay for all of your personal expenses (rent, groceries, clothes, vacations, etc.) out of your personal account and all of your business expenses (supplies, equipment, salaries, etc.) from your business account.

This is simple, but not necessarily easy.  It may require a shift from how you’re accustomed to doing things now.  Newer entrepreneurs may be saying, “STOP!  I haven’t yet created success with my small business. I don’t make enough money from my business to pay for all of my business expenses.”  If this is the case, simply make loans as necessary from your personal account to your business account and be sure to keep records of those loans.  When your business becomes profitable, it can pay you back.

You should also have a separate business credit card.  Charge personal items to your personal credit card (and hopefully pay off the balance every month) and charge business expenses to the card that you’ve designated as your business credit card.  This way, if you’re carrying a balance on your business credit card, then the interest will be tax deductible.  This isn’t possible if there’s even one personal expense on the card.

Now, what about those expenses that cross the line – a portion is personal and the rest business?  An example might be your automobile expenses or some of your household expenses if you work from home.  For these items, I suggest paying for them from your personal account BUT keep very clear records.  Have a small book or log in your car to record business mileage.  Keep all your household bills (mortgage/rent, phone, utilities, etc.) filed away so that you can use them at tax time to determine what percentage you are able to write off as a business expense.

There are three reasons why it’s important to follow these suggestions:

1. If you don’t treat your business as a business, you’ll never make a business income.

2. If you don’t keep appropriate records and you’re audited, the IRS may classify your business as a hobby.  This could mean loss of tax deductions and potential penalties.

3. You’ll be easily able to track  your progress towards success in your small business, determining when you’ve become profitable.  This allows you to make any necessary adjustments and corrections along the way.

Have faith in yourself.  You can do this.  Visit http://www.AbundanceBoundSystem.com for all the step by step guidance you need to ensure you are laying the proper foundation that will support your success and allow your small business to thrive.

Abundance Bound System

Enjoy!