Hi, my name is Bola Sokunbi, and the founder and CEO of Clever Girl Finance, where we empower women to achieve financial wellness. Today, we'll be talking about how you can set up your finances to transition from a part-time to a full-time business owner. Transitioning into your business full-time is totally possible, but you need to have a strategy in place to do this successfully, especially when it comes to your finances.
Having a personal budget will help you get clear on the personal expenses you need to pay for, and also help you understand how much of a salary you will need to pay yourself from your business. When you go full time. Creating a personal budget is also a great way to identify your non-essential expenses and cut back as necessary. Having a business budget will help you determine all the one-time and recurring costs you'll need to pay for each month.
By having a business budget, you'll be able to create a baseline of how much you need to earn at a minimum to keep your business running, including your salary. It will also help you track your income and expenses and will help you determine your business profits or losses. Knowing your intention is to become a full-time business owner. You want to create a plan to save money, to cover your basic living expenses that you have identified for a few months.
For example, at least six months, essentially, you want to have a good amount of cash put aside. To cover your personal expenses and view venture. I'm able to pay yourself a salary from your business right away. Waiting until your business starts making some money is not a bad idea. It gives you an opportunity to prove your concept and also helps you determine what works well, and what doesn't.
The income your business generates does not need to replace their work salary entirely. But it should be enough to cover basic business and personal expenses before you quit your job. Once your business starts making money. It's a good idea to put some money aside in a business emergency account and towards future business projects and goals. Having money put aside will allow you to weather slow seasons and allow you to continue to pay yourself and your team salaries.
I hope you have found these key tips helpful. And thank you so much for watching.