I want you to step back for a moment from playing the role of busy entrepreneur and ask yourself if you’re a builder or a planter.
Stick with me for a minute. Here’s what that means.
Author Paulo Coelho says that builders are the ones who spend years building things and then find that they’re boxed in by their own creations. Planters, on the other hand, must constantly tend to their gardens, which in turn, throughout difficulty and the ups and downs of life, continue to grow.
It takes a lot of work to build a business. You must have courage, self-discipline, and know how to create opportunities for yourself. It takes a certain character to become an entrepreneur.
That’s why if you’ve spent that precious time building one in service of that thing you love to do and the people you love to serve, I want you to be a planter instead of a builder, particularly when it comes to your finances.
Because, when you focus just on building instead of tending to all of the essential money pieces, you can easily hit an earning ceiling without a clear path out.
Whether you’ve been doing this for two months or two years, the following three pieces are must-haves to run a business that’s going to continue to grow and work for you for years to come.
3 Essential Pieces for Every Online Business
1) Sign up for a business bank account.
If I could shout one thing from the proverbial rooftops, it would be this: you must separate your personal and business finances!
I talk to so many entrepreneurs who tell me they have yet to start a business bank account and aren’t sure how much they’re making because their personal finances are mixed in with everything else.
What they don’t realize usually is that the account doesn’t have to be an actual business account (like when you’re a corporation). It can be as simple as starting a separate account from your personal or joint accounts.
Why is this step so critical? Because having a separate bank account keeps things financially organized. This clarity can help you make smarter financial decisions, like how much to budget for a coaching program, how much you can spend on a launch, and how much more you need to make to keep growing.
Plus, mindset-wise, taking this step is huge. You’re making a declaration to yourself that you’re running a business and not just entertaining a hobby.
If you’re in Canada, you can sign up to my favorite bank, Tangerine, with my Orange Key 16898465S1, which will give you $50 when you deposit $100. Free money is the best.
2) Get your Source documents in order.
What are source documents, and why should you care about them? They’re any piece of financial data that has to do with your business, so examples are:
- Bank statements
- Credit card statements
- PayPal transactions
- Etsy sales data
- Stripe transactions
- Shopify sales data
They’re important to keep in order and up to date in case of an audit, which as you allow yourself to grow, becomes more of a possibility. The Canadian government requires that you keep documents like those for up to six years.
If you’re not currently using some kind of cloud-based system to keep those docs in order (and nope, that stack of shoeboxes doesn’t count), I recommend using Dropbox. When you sign up through my affiliate link, you’ll get 500MB of bonus space, which is around 600 images.
3) Sign up for a cloud-based bookkeeping software.
Okay, I may seem biased because I’m a bookkeeper, but this piece is seriously important.
Simply put: when it’s easy to keep your books in order throughout the year, you can save money (and then plan to make more of it).
As an added bonus, tax time will be far less of a headache.
While I have a fondness for DIY spreadsheets, they’re no match for the ease of cloud-based bookkeeping software like Xero (affiliate link), Freshbooks (affiliate link), or Wave.
For example, if I wanted to enter a sale into my bookkeeping spreadsheet, I would have to enter it twice to account for debits and credits. (Remember those? If not, click here.)
With something like Xero, all you have to do is enter the amount into your Sales Journal. Then the accounting software automatically accounts for both sides.
Plus, with these online programs, you can log in from wherever you are in the world. No more purchasing pricey software and then installing it onto your computer.
If you only had time to take action today on one of the above suggestions, I would recommend starting a separate bank account first. It’s that important. (When you open it, tweet me @lsbookkeeping or write me an email at firstname.lastname@example.org. I love celebrating those critical steps with entrepreneurs.)
Then, if you need help with the other steps, you can check out my free resources in the Resource Library. If you’d rather have personalized support, I would love to meet you. 🙂 You can fill out this form first to make sure we’re a good fit.