Managing Your Finances as a Solopreneur
What you need to know for your business finances.
For part of my career, I was on the executive team at a small startup. Every month, we’d review the company’s financial performance, compare the results to the budget, and make adjustments if necessary. We also had to make decisions about hiring, larger business investments, and the overall direction of the company.
Today, I’m a solopreneur. I run a freelance writing business and create online resources for other freelancers/solopreneurs. Even when my business was very new and very small, I paid close attention to my finances. Because of my past experience, I know how to manage my money and how to plan for different things (particularly unexpected expenses!).
But a lot of solopreneurs don’t have that corporate background — and don’t know where to start. There are a few basic things you should understand about your business finances and also know when you need outside help. You can’t ignore the money part: as long as money is coming in, you should know how it impacts the overall health of your business.
Reviewing overall profit and loss
Every month, I review my business’s Profit and Loss Statement (P&L), which tracks all your money coming in (revenue) and money going out…