Here’s how you can stay on top of your finances as a solopreneur
Acting on a vision, getting a business off the ground, and running the day-to-day doesn’t leave much spare time for those operating a business on their own. Also known as a “solopreneur,” business owners who don’t have any other employees besides themselves can often fall behind on some banking best practices.
Solopreneurs have been on the rise in the U.S. in recent years, with over 80 percent of small business owners reporting having no employees in 2019. Given the trends and the challenging nature of solopreneurship, here’s a look at some best banking practices to help business owners in this position:
- Open a business banking account– First and foremost, you’ll want to take this crucial, yet sometimes overlooked, step that will enable to you to easily separate your business and personal expenses. This is also important for legal reasons if your business is incorporated. Once you have a business bank account setup, applying for a business credit card will give you a great tool for financing larger business expenses.
- Track personal and business expenses separately – By opening a business bank account and using a business credit card, this step becomes much easier to do. When starting and operating a business entirely on your own, it can be particularly easy to blur the lines between personal and business expenses. However, budgeting and tracking expenses for both your personal and business life is essential for claiming tax deductions and may help your business appear more professional.
- Go paperless – Whether it’s bills, invoices, or expense receipts, shifting from paper to electronic versions will increase your ability to stay organized while being able to easily access records and keep your physical space less cluttered. Even in 2023, sometimes you can’t avoid using paper records, but try to make the shift as much as possible. Should you ever be subjected to an audit from the IRS on any business claims you make, you’ll need to be able to easily access receipts for any relevant expenses.
- Work with a banking partner that knows you – You’ve proven to be capable of accomplishing a lot on your own as a solopreneur. But don’t overlook the value that another set of eyes from a professional can do for you and your business. Finding a banking professional who truly knows and understands your unique needs and situation can eliminate a lot of stress and hassle in your life and business operations.
Solopreneurs play a key role in diversifying our economy as more innovators and business-minded individuals take the leap to advance their bold ideas. However, without careful planning and financial management, many new business visions won’t come to fruition.