Here are a few tips on how to become financially stable as you build your business:

Keep personal and business finances separate

The reason for this is clear to any objective mind. You are not your business and your life will go on with or without your business. So distinguish yourself from your business as much as possible. Incorporate your business so that it develops its own identity and gives you the freedom to live your own life independently of your businesses ups and downs. Also open up a separate bank account for your business. If you borrow from your business or vice versa make sure you pay back and treat all money you invest in the business as a loan. This way if the business is in trouble or debt you and your family will only suffer to a certain limit.

Pay yourself a salary

Contrary to what you have heard about paying yourself a tiny salary or allowance you should actually pay yourself what you are worth to your business or what you would have to pay someone who does what you do for your business in your absence. The reason for this is that this helps you have your own financial life and limits the temptation to pass on your personal bills to the business and vice versa. Also getting paid for the work that you do for the business gives your balance sheet a true reflection of the business and helps gives you a true sense of value for your skills. IF your business is unable to pay you still write up your salary as an IOU – it will give you a reason to keep working hard so that you can claim your back salary from your business when your ships come in.

Stay Marketable

Even though you quit your career to start your business don’t kill your career totally. Even though you don’t ever plan to go back to employment stay marketable just in case. Update your CV with relevant tasks and projects from running your own business. Take as many courses that will keep you at the top of your career and collect as many certifications so that if the opportunity or need arises for you to go back into your career you can fall back into place without having to take a demotion or pay cut.

Source: www.nerveng.com