Han­dling your fi­nances as an en­tre­pre­neur

It is ad­vis­able that you sep­a­rate your per­sonal and busi­ness fi­nances

Move! - - CONTENTS - By Pheto Ra­makobya

MAN­AG­ING your busi­ness' fi­nances is sim­i­lar to man­ag­ing your per­sonal fi­nances. They both re­quire dis­ci­pline and hav­ing a long-term vi­sion and plan. It is im­por­tant that you do not get ex­cited about the money com­ing into your busi­ness and ad­vis­able that you get some­one to help you man­age your fi­nan­cial com­mit­ments. Akhona Mon­akali, a fi­nan­cial ad­vi­sor based in Bloem­fontein, shares ways to han­dle your fi­nances, as an en­tre­pre­neur.


Akhona says it is a good idea to keep your per­sonal and busi­ness fi­nances sep­a­rate as it will give your busi­ness more cred­i­bil­ity and a sense of le­git­i­macy. In some cases, it may also help to re­duce your per­sonal li­a­bil­ity should some­thing go wrong with the busi­ness. It will also help you to be or­gan­ised when it comes to pay­ing your taxes, man­ag­ing your bills and other pay­ments.

“If your busi­ness were to close down to­day, would you still ex­ist? Of course money for your per­sonal needs would still need to be avail­able. You need to start putting this money aside now and this doesn’t hap­pen only when your busi­ness is mak­ing a lot of money. If you have a prob­lem putting aside R1 000 to­day you will not be able to put away R1 mil­lion in the fu­ture,” says Akhona.

“A lot of en­trepreneurs have found them­selves pen­ni­less even af­ter run­ning a busi­ness for years. The busi­ness fi­nances be­long to the busi­ness. Your money is yours. Pay your­self. You can do this with a salary, div­i­dend, bonus, draw­ings or a com­bi­na­tion of things. You can start small and work your way up.”


She says your per­sonal life shouldn’t be in ru­ins while your busi­ness strives and vice versa.

“If you are run­ning a busi­ness, it is very easy to get caught up in a life­style that is far from what you can af­ford. When you own a busi­ness, you have full ac­cess to the busi­ness’ bank ac­count and no­body will stop you from us­ing the money. Be­cause of this ac­ces­si­bil­ity, it is even more crit­i­cal for en­trepreneurs to work within a per­sonal bud­get. Imag­ine run­ning out of petrol money and your busi­ness ac­count has hun­dreds of thou­sands in its ac­count, you will ob­vi­ously dip into the ac­count,” says Akhona.


A lot of busi­nesses have failed as a re­sult of the own­ers us­ing the busi­ness’s fi­nances for their own per­sonal goals.

Akhona ad­vises that you think of ways your busi­ness can fund your goals with­out putting it at risk in the process.

“Your busi­ness fi­nan­cial goals should not be your per­sonal fi­nan­cial goals be­cause prob­lems arise when you mix the two. Let’s say buy­ing a car is one of your goals. Many peo­ple have used money from the busi­ness to fund their own per­sonal goals only for the busi­ness to suf­fer. It is easy to put your busi­ness at risk if you don't have a per­sonal bud­get. Do not carry the busi­ness' bank cards to pre­vent you from us­ing the busi­ness' fi­nances,” she says.

“In­stead of you dip­ping into the busi­ness’ ac­count, think about what the busi­ness needs for it to pay you enough to af­ford the things you want. For ex­am­ple, you may need to earn a salary of a cer­tain amount to af­ford those things.”

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