Managing your finances is an essential part of successful self-employment. Working for yourself, you are really just running a micro-business, with revenues and expenses, one that aims to generate the money you need to live on.
Financial Management
You should have up-to-date information and record-keeping in a simple spreadsheet:
- Update it regularly with business expenses and income.
- Include all the money you need to spend in order to deliver your product or service.
- Add any regular payments like software subscriptions, internet, etc.
- Use it to make financial projections by estimating future earnings and expenses.
Your cash flow - the money you estimate your business will have in the bank at the end of each month - helps give you advance warning of potential financial ups and downs, so you can anticipate when you need to spend less and/or go out and find more work/sales.
Budgeting
It’s important to be realistic about your personal financial needs, like, rent, food and travel; make sure your business activities can generate enough money for you to live on. It’s not unusual to need to support your self-employment with part-time work in the early stages.
Funding and Investment
It’s always preferable if you can get started without needing to find investment or funding, because looking for it can take up a lot of your time and energy and distract from your work.
Sometimes you might need to pay for materials or production ‘upfront’, consider:
- friends and family
- banks
- private investors
- charities, funds and foundations
- your own savings
- events and Crowdfunding campaigns.
This resources has more funding advice including details of funding schemes run by UAL.