How to Manage Cash Flow for Your Home Pet Business
Sign up for an accounting workshop
Every business needs to monitor the money coming in and leaving out, whether they are taking care of two dogs or 200. Taking an accounting class is one approach to make the accounting and financial structure of your company seem less intimidating. Basic accounting and/or managing money for a small business are topics that are covered in a wide variety of online seminars and articles. You can also inquire at your neighborhood Small Business Development Center (SBDC), which might provide lessons in small-business accounting or maintain a list of classes provided by nearby community colleges or continuing-education programs at a nearby university. When enrolling in an accounting course, use logic and avoid selecting one that covers material you don’t now require or don’t comprehend. To run your $20,000 local pet-sitting business, you don’t need to know how to read the financial report of a $60 million worldwide corporation.
Keep every receipt for every penny you spend on the business. You have probably heard this before if you have ever owned even the smallest business or worked for anybody else, but it bears repeating. Keep them in one location and make at least weekly entries in your ledger. You may learn a lot about your company from these documents. You might spot trends, expenses that seem disproportionate, or other adjustments that would improve the efficiency of your company.
Set up a separate checking account
You need to be careful not to establish your pet-sitting business and then just use your personal checking account to pay for expenses and deposit income because doing so frequently doesn’t require a lot of startup money. Create a unique checking account just for the business. Use this account to pay for anything, even if you use the debit card it comes with rather than actually writing a check. Give the business a separate checking account; it doesn’t need to be a “business” checking account; another personal account would do. Having separate accounts and ledgers results in certain psychological elements for taking yourself and your business seriously. It’s beneficial for keeping proper track of spending as well. Have the business name printed on your checking account designated for your business; it gives the account a professional appearance.
Get bookkeeping software
There are many software solutions available for simple bookkeeping setup for your small business. Microsoft Office and QuickBooks are two of the most popular ones. Set up a significant amount of time to get set up, and then set aside time on a regular basis, perhaps an hour once a week and a morning once a month. To stay as current as possible, make sure to keep these software items updated by subscribing to automatic updates or reminders. Tax systems are constantly updated, whereas bookkeeping programs most likely won’t have as many. Hire an accountant if you are confident enough in yourself to understand that you won’t set aside this time to update your bookkeeping program. Tax season is the same. At least for the first year of operating your business, you might wish to obtain the help of a small business tax specialist to determine which expenses can and cannot be written off.
Creating invoices and receipts
Always give your client an invoice for your services, even if you only need money up front. This enables you both to keep track of your visits. You might want to think early on about having client software that maintains track of your clients depending on how quickly your business plan depicts your business increasing revenue and adding clients. You may use Excel or Google Sheets to build a spreadsheet if your target for the first year is to have only ten clients. You might wish to spend money on company software as you expand. It also maintains an easily accessible history of the services you rendered in addition to creating invoices.
Options for payment
Because your fees are often only for a few hours at a time, the simplest way to collect money in a business like pet sitting can be good old cash or a straightforward account transfer via an app like Venmo or PayPal. As your business expands, you should consider offering credit card options, such as the simple-to-use Square payment system, which enables you to use your mobile device as a mobile cash register (https://squareup.com). Setting up a bank account, a merchant account for credit cards, and a payment processing system are required for this. There are certain initial payment costs and transaction fees (which are typically between 2 and 4 percent). You can take payments from Visa, Mastercard, American Express, and other credit card issuers with the help of a merchant account. To compare possibilities, search for merchant services.
yourself a salary
One benefit of starting a low-cost, no-overhead firm is that you can typically start taking money out of the business early on while investing the rest back into it. If you are aware of your continuing costs, you may pay for them while still having some money left over. However, if your goal is to establish a sizable pet-sitting company with offices and numerous staff, you will need to invest almost all of your earnings for the first year or two, much like other businesses. This means that before establishing your firm, you should set aside some cash to help you pay your bills. Depending on how complex a firm you develop, you should probably aim to do this for at least the first year if you can afford to do it.