One of the best parts of being an entrepreneur? You get to call the shots! However, some things are out of your hands—like paying taxes and making sure your cash flow keeps your business running smoothly. That’s why it’s crucial to plan for the future, especially when it comes to managing your profits. So, what’s our money management for entrepreneurs advice? 

Let’s break it down…

Where Should Your Money Go? 

Think of it like a roadmap, not a strict formula. Every month, once you’ve wrapped up your bookkeeping and figured out how much you made, spent, and have left over, you’ll need to decide how to allocate those profits. This isn’t about throwing random numbers around—it’s about using percentages to give your business the balance it needs.

Let me walk you through a quick example.

Profit Breakdown: An Example

Let’s say Sally earned $10,000 this month. She spent $4,000 on business expenses, leaving her with $6,000 in profit. Here’s how she might divide that profit:

– $3,300 for herself (because paying yourself is essential!)

– $1,200 for federal taxes (or setting it aside in a savings account)

– $300 for state taxes, reinvestment, and savings respectively

– $600 to pay off debts

Keep in mind that the percentages you see here are just suggestions. Each business owner will need to tweak them based on their unique needs and goals. But the key takeaway? Know your numbers and make those numbers work for you!

Here’s Where You Come In

To allocate your funds wisely, you’ve got to know your numbers. That means tracking expenses, categorizing your spending, and keeping your accounts organized. Sure, you can handle this yourself, but if you’re not a numbers person, there’s no shame in asking for help.

We at Patton Accounting and Tax know all about managing profits, taxes, and cash flow, and we’re here to make it easier for you. Here’s how we can help:

– Book a consult: Let’s chat about your specific numbers and come up with a strategy that fits your business.

– Get help planning for taxes: Taxes don’t have to be a mystery. We can help you know exactly what you’ll owe, when you’ll owe it, and even lower your tax bill with smart strategies.

– Delegate all things money: If all of this is stressing you out, let us take over. We’ll tell you where to put your money, when to move it, and how much to save or reinvest.

Basically, you’ve got options! And as always, we’re here to help you feel confident about your business, goals, and finances. So let’s chat!