I found this posted elsewhere but it may help others with similar questions here
for a business to run you need consistent cash flow you can depend on,
not a hobby that provides you with a bit of extra cash to spend
no one can predict the future, but you can push the odds of success in your favor.
you must keep your business cash flow and expenses totally separate from personal expenses
obviously you need to consistently pay your daily operational expenses
and ,
replace tools and consumables, like welding rods shield gases,
and purchase materials before you can draw a salary,
be aware there will always be good and not so good weeks ,
your consistent financial draw should be based on the worst weeks.
you can,t base a draw on the occasional good week returns
having done something similar in the past Id suggest you simply have, or start a second savings account,
you can use it to transfer lets say $600 every week into , every week, as the theoretical pay check,
don,t spend the cash, unless you're forced too.
think of it as a financial safety cushion, your building from the business.
think seriously about incorporating, to limit your financial risk
and if you find you don,t need to touch that money after lets say 3 months
start pulling lets say $700 a week into that account every week for 3 more months,
keep upgrading the theoretical pay check amount by $100 a week, over stepped increases of $100 more a week, every three months
at some point you'll find you can,t do that regularly,
once youve done that you will really know what you should be pulling out of the business. and personally,
Id drop the amount I was putting in that savings account, as a potential weekly draw,
back a couple hundred dollars a week and keep building that financial cushion
and if its a hobby you won,t be able to consistently put cash away,
if you can,t consistently put cash away , its a hobby that supplies side cash flow,
not a business your growing to depend on.
obviously youll need to pay your daily expenses to stay functional as a shop, and
if you can,t consistently every week,
put away that theoretical paycheck ,
over and above the operational expenses its not a business
you need to keep an accurate account of cash flow
that requires
good accounting software
https://quickbooks.intuit.com/
https://www.fundera.com/business-accounting/free-accounting-software
https://www.getapp.com/p/sem/field-service-management-software?t=Top Small Business Software&camp=adw_search&utm_content=g&utm_source=ps-google&utm_campaign=COM_US_Desktop_BE-Field_Service_Management_(FSM)&utm_medium=cpc&account_campaign_id=1541690140&account_adgroup_id=60936294873&ad_id=295719891258&gclid=EAIaIQobChMIov-Gi4-e6gIV8wl9Ch3aQgz9EAAYBCAAEgKhQvD_BwE
https://www.capterra.com/sem-compar...MIl_DGn46e6gIVFD6tBh3f3gBMEAAYASAAEgIClvD_BwE
I'll try and keep this short. So for the last 10 years my fabrication work has strictly been a side gig, but in the last 3 years, ive gotten enough work where ive slowly transitioned out of my former full-time job, and am turning the side gig full-time. Ive been renovating a shop space for the last 2 years, and its almost time to make the big move. So, for you guys that have small shops/businesses, do you have any words of wisdom for someone in my shoes? I know that theres potential for me to get spread thin doing both the work aspect and business-running aspect of a new shop, so is an accountant something I should spring for right off the bat? Is there any steadfast policies that have worked for you? Any recommendations for shop insurance and how you let customers interact with your shop space? Should I pay myself a salary right from day one? Any words of wisdom or "I wish I had" 's are greatly appreciated.
for a business to run you need consistent cash flow you can depend on,
not a hobby that provides you with a bit of extra cash to spend
no one can predict the future, but you can push the odds of success in your favor.
you must keep your business cash flow and expenses totally separate from personal expenses
obviously you need to consistently pay your daily operational expenses
and ,
replace tools and consumables, like welding rods shield gases,
and purchase materials before you can draw a salary,
be aware there will always be good and not so good weeks ,
your consistent financial draw should be based on the worst weeks.
you can,t base a draw on the occasional good week returns
having done something similar in the past Id suggest you simply have, or start a second savings account,
you can use it to transfer lets say $600 every week into , every week, as the theoretical pay check,
don,t spend the cash, unless you're forced too.
think of it as a financial safety cushion, your building from the business.
think seriously about incorporating, to limit your financial risk
and if you find you don,t need to touch that money after lets say 3 months
start pulling lets say $700 a week into that account every week for 3 more months,
keep upgrading the theoretical pay check amount by $100 a week, over stepped increases of $100 more a week, every three months
at some point you'll find you can,t do that regularly,
once youve done that you will really know what you should be pulling out of the business. and personally,
Id drop the amount I was putting in that savings account, as a potential weekly draw,
back a couple hundred dollars a week and keep building that financial cushion
and if its a hobby you won,t be able to consistently put cash away,
if you can,t consistently put cash away , its a hobby that supplies side cash flow,
not a business your growing to depend on.
obviously youll need to pay your daily expenses to stay functional as a shop, and
if you can,t consistently every week,
put away that theoretical paycheck ,
over and above the operational expenses its not a business
you need to keep an accurate account of cash flow
that requires
good accounting software
https://quickbooks.intuit.com/
https://www.fundera.com/business-accounting/free-accounting-software
https://www.getapp.com/p/sem/field-service-management-software?t=Top Small Business Software&camp=adw_search&utm_content=g&utm_source=ps-google&utm_campaign=COM_US_Desktop_BE-Field_Service_Management_(FSM)&utm_medium=cpc&account_campaign_id=1541690140&account_adgroup_id=60936294873&ad_id=295719891258&gclid=EAIaIQobChMIov-Gi4-e6gIV8wl9Ch3aQgz9EAAYBCAAEgKhQvD_BwE
https://www.capterra.com/sem-compar...MIl_DGn46e6gIVFD6tBh3f3gBMEAAYASAAEgIClvD_BwE
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