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Ep 135: Three ways to BUILD and FEED a business vs. personal budget



One of the things every business needs, my business needs it, your business needs it. So and so, Mary Jo, Sally, whatever their name is, their business needs it. It's FUNDING and funding to do some of the simplest of things. That could be website hosting, it could be marketing, it could be funding to build the next greatest prototype of something. Funding is important, and one of the best sources of funding, I think, especially if you're still working your 9-to-5, is your 9-to-5. One, you can escape debt-free. And I am a firm believer that if you can start and build a business without debt, it's like magic. So we're going to get into some of the creative ways that you can build and feed a business budget and all while keeping that personal budget out of the way.

In this episode, you'll learn...

  • Creative way's to get your biz account funded on a regular basis while you're building the biz

  • Quick turnaround ways to keep finances separate

  • Decision factors on how much gets put into a business account if it's fed by your 9-to-5

A friend of mine was telling me about his project that he had going on in his business and he currently is a side hustler. So he has a 9-to-5 and he's got a side hustle, a business that he hopes to one day make a main hustle. And so he's telling me about one of the projects that he had just secured a visual artist for his upcoming production and he was super, super excited about it and we were having a good conversation and he says, "You know what, I need to start spending more on marketing dollars." And he goes on and on and on to talk. And then he said, "So far I have like $50 from every paycheck going over into my business account. It's time for me to amp that up." And my mind halted for a second when he said that.

So he currently has a recurring deposit set up, that for his paycheck, a portion of it is going into an account for his business. So naturally he's self-funding, but he's self-funding on a very consistent basis. And so that got me to thinking when you talk about both working a 9-to-5 in raising a new business, the subject of intermixing finances is a big one because you haven't quite got a full-fledge business off the ground and it's super easy when you're smaller. Him taking it from my own experiences, super easy when you're smaller and I'm still small now, so you get that mix of "Okay wait, I have this money over here for my business but wait a second, I need to take some of this and use this over here." And then things start crossing lines right when they need some clear separation, that's one thing. But even solving for the fact of having that consistent flow of cash coming into the business, especially while you're in the place of trying to make the business self-sustaining, that's a whole another interesting issue to delve into.

1. Automate a deposit from your 9-to-5 paycheck every pay period.

So as I heard him say, the concept of essentially, "Hey, my paycheck is being invested into my business and in an automated fashion", that's essentially what he said. It made me think, "Hmm, one I should consider doing something like that." Cause I don't do it today. I don't do that today. And two, it made me think how many other people also don't do that today. You may have the money to put into your business but you may not do it on a regular, consistent basis. And for me, that can become a nightmare, an accounting nightmare. And if you have heard the episode about To hire or not to hire an Accountant, you'll understand exactly what I mean.

So when we're thinking about building our businesses and still working the 9-to-5 and dealing with a budget for the business and dealing with our own personal budgets, one of the ways to make sure we have these differentiated budgets can be to start setting up some automatic things happening. So just like in his example for the paycheck, for every paycheck that comes, maybe it's X percentage, maybe it's a certain dollar amount goes into another account that feeds the business. Now feeding the business, getting it from the paycheck is one thing. But there are other ways to feed the business. And my mind just started to go and, Oh a ton of different directions.

2. Plan to use a portion of your annual tax refund or bonus annual.

So when you think about other creative ways to feed your business and self feed your business, one of the other ones that I like is to think about on an annual basis, what happens on an annual basis. Tax time comes around and you may or may not get a refund. I guess the reality is if you've done super great tax planning and you end up with no refund, you've actually done the perfect thing that you can do for your budget. Now, if you end up having a refund as most of us do, you can take those funds and then go ahead and reinvest them into your business or take a portion of them on an annual basis. That's something that you know happens over a repeated time period every year. One of the other things that may happen for you is "Bonus time", so if you get a bonus at the 9-to-5 you can think about that annual infusion of cash that's going to happen inside of your business and started planning your budget around some of those major milestones if you choose not to plan it around a paycheck that happens every two weeks or that happens monthly and perhaps it's some combination of both of them.

I guess the reality is if you've done super great tax planning and you end up with no refund, you've actually done the perfect thing that you can do for your budget. (Click to tweet)

3. Instead of birthday or anniversary gifts have friends and family donate to your business

Now another idea that I like about both building up that budget and feeding that budget is thinking about birthdays and anniversaries in a different way. So most often, depending on how old you are, that concept of birthday party may feel like, "Ah, something I used to do when I was 16" but there's a lot of us still older. Even if it just means going out with friends or going to grab something to eat at a restaurant, we do some type of birthday celebration. Well, one of the things that you can think about there is making sure that your intention and the fact that you're on this journey that you're building this business is known by your friends and family. And then instead of gifts, you could set up a special account. I'm sure there is something out there. So if you were to Google, there are a lot of places that will do, in lieu of gifts, you can donate to a charity or in lieu of gifts you can set up a special travel fund or what have you. So there are a lot of places out there that will help you execute this, but you can let those folks know, "Hey, the most important gift that you can give me is to help me build my business. It's going to help me take control of my time and do all this great stuff." And then you can start having another source of funding coming through in a way where they would have even used something anyway. Just help them donate straight into your business. And then for you, you also don't have to worry about, well, so-and-so gave me 50 bucks for my birthday. I planned to put this in my business account, but Oh, Applebees looks so delicious and you spend it. You know what I mean? So many different ways and creative ways that you can use to fund your business account.

Now when it comes to perhaps how much money should be put into your account, especially if you're feeding it from your paycheck or you're feeding it from an annual basis, know that, that's all up to you and what you can tolerate. So I don't think there are any prescriptive dollar amounts that say, "Hey, you shouldn't make sure experts into your income is going towards your business." At least not any that I would say there may be some overarching guidance that exists out there. I'm just not aware of it. But I would say take into account obviously the things that you need to live and survive and be comfortable and so you really can figure out what margin is there for you to play with. What does that discretionary income look like for you? And go ahead and do your investment and in that light. So you've got the opportunity to build and feed that business budget and keep it separate from personal. And you've got the ability to do it in some very automated ways and some very creative ways. So it was just a little something for you to play around with.

And now if you don't have a separate business account or I won't even say business account formally, cause maybe you haven't decided on your corporate structure yet and you haven't gone through setting up all the formalities around your business. You're still trying to get it off the ground and you're just kind of testing and learning your way through it while you still have the opportunity to keep things separate. And one of the ways that I would think about is using something like a cash card from Square. So if you haven't heard of Square, Square have the cash app, they have the square reader. But you've probably seen if you've ever gone out to like a craft fair or anything like that, there's a little reader sticking out from somebody's phone. It looks like a little square and you can swipe credit cards, that type of thing. Well, that's the company that also makes the cash card. And so essentially it's a debit card and you can very easily spin up this debit card. They'll send you the card for free, you download the app, get your new account set up. You can transfer funds directly from an existing debit card and so you can use something like that even if you don't have your business account established yet to keep money separate and to keep funds separate. And then on the square cash side, it will keep track of all the expenses. It'll show you what you're spending and then you can just think about, "Hey maybe I want to throw 50 over here, maybe I want to throw a hundred, maybe 300" whatever it is. And then you can easily keep those things separate and make your purchases on a separate card.

Square register and card reader

Now one other good thing that Square has, and I haven't yet ventured into their new card, but I'm excited to do it, is Square now has a business card. So just like the personal square card that you can get, you can now get the business card as well. So I would take a look at Square and I've got some links in my show notes page. If you go to for this episode, look for the show notes and there are some links there that can help you get started and get things separated and keep you moving. So with all this information, take it and take action now.

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