A business plan is recommended even for a sole proprietorship. Running a small business can be very rewarding, but only if you have things in order. Owning a business is not a pastime. It is your source of income if you quit your job and start your own business. Follow these steps to build a solid business foundation and separate your personal and professional lives:
• Keep your professional and personal lives separate.
Set up a dedicated workspace in a professional setting. Establish working hours that allow personal time and do not interfere with free or family time. Separate your specific personal and business finances by opening bank accounts to handle your business funds.
• Pay yourself first.
Pricing your services will help you focus on how much money you want to make and how to price your services to meet that goal.
• Praise raises, bonuses and retirement savings are all ways to reward yourself.
Some self-employed business owners link their rewards to their company's goals and objectives. If you achieve one of your more ambitious goals, give yourself a cash bonus from the company's profits. This strategy may seem silly — after all, it's your own money — but many freelancers and independent contractors say such incentives are essential for staying focused and on track.
• Evaluate your performance.
Assess your performance about business goals and objectives. Make certain that your clients are involved. After major projects, discuss their satisfaction levels to see how you and your company are doing.
• Carry out your business plan.
It's easy to absorb day-to-day business needs, whether collecting an unpaid bill or dealing with a looming client issue. If you are not really careful, you will become so preoccupied with serving clients that you will forget to run your own business. That's where your business plan comes in, keeping you focused on your goals and objectives and the action plan's deadlines.
• Save money in casework slows down, or a client fails to pay on time.
Determine how much money you'll need to get by for a month, two months, six months, or whatever. Then, create a cash reserve — not in a personal bank account, but in a business savings account where you won't be tempted to withdraw funds during the holidays or on vacation. We cannot emphasize this enough, especially during difficult times. A sufficient cash reserve can mean the difference between surviving a difficult period and going bankrupt.