How to Avoid Financial Pitfalls :: Part 1Tuesday, April 07, 2009
Written by guest expert Tim Gill of The White Box of Wedding Design.
Avoiding Three Major Financial Pitfalls in the Wedding Planning Industry
As CFO of The White Box of Wedding Design, it is my responsibility to make sure every dollar is being spent as wisely as possible and every contract is maximized while maintaining our goal of meeting the exact and specified needs of our clients. I’ve learned a few things along the way and would like to pass this advice along to you so that you may learn from this, rather than experience these financial pitfalls yourself. So let’s dive in!
1. Keep your business accounts separate from your personal accounts.
I know this may seem like a very obvious point, but set up your business in a way that allows for clear differences between business expenses and personal expenses. The first thing you want to do is have a separate checking account for your business. In order to obtain this, the bank will need either your Assumed Name Certificate (“doing business as” or "DBA" for a sole proprietorship) or the Articles of Organization (for an LLC).
Deposit any money that you have designated as profit from your business up to this point into the account as a starting balance. In the beginning, if you need to “borrow” money from yourself to build your business, that’s okay. Just make sure you consider it a “loan” in your mind and establish a plan to pay yourself back.
Beyond paying back these “loans” you should also be making a profit! Always have enough money in your business account to continue your operations and pay your bills, but don’t forget to pay yourself as well.