Have you decided you want to start your own business? You’ve saved up enough cash and read all of the things you must avoid. What are some tips for your first business?
Business and Personal Funds Should Never Be Combined
You should never mix your business and your personal funds. Separating them will help you avoid messy paperwork come tax season. As you invest in your business, make sure to buy items that help with daily functions. This could be accounting software, cloud storage or anything else that will keep you up to date only our company’s p and l, or property and loss.It may not be the most glamorous investment but you’ll be glad you did it.
Get Enrolled in a 401K
You’ll also want to invest in yourself to shield your savings. Because you don’t have an employer backed 401k, you’ll need to get one on your own. Options include a self directed IRA, a simple IRA or SEP IRA. Contribution limits can actually be higher than with an employee plan.
Buy Disability Insurance
Because you’re your own boss, you’ll need a safety net in case you get sick. You’ll want to buy disability insurance. This type of insurance is designed to replace lost income in the event you’re not able to work. Disability coverage proves to be especially valuable if you have are supporting children and/ or a spouse financially.
Have an Investment Portfolio
Perhaps most importantly, have an investment portfolio that you don’t dip in, even if your business sees dips in its profits. That way, if your entrepreneurial ventures don’t turn out as planned, you’ll still be safe and able to enjoy a comfortable retirement.
Starting your own business can feel overwhelming. While there are a lot of things to do, there are a few steps you cannot forget to take. Always keep your business and your personal finances separate. Make sure to enroll yourself in a 401K as soon as possible. Be sure to purchase disability insurance and always have an investment portfolio on hand.