Bellah is a single mom of three and runs her own construction company. She’s always had an entrepreneurial spirit and during lockdown has found innovative ways to keep the money flowing by making biltong. She’s also been buying garden equipment to expand her maintenance offering.
While Bellah is never short of new ideas, she’s struggled with financial management and cash flow. Last year her construction business had a turnover of R1,3 million, but she had no idea whether she was making a profit. When she joined the Money Makeover Challenge, her business had a significant overdraft and her personal finances were heavily reliant on credit.
Bellah has been working with Absa financial adviser Stacey Coulson and senior enterprise development specialist at Absa Elton Govender. Despite the Covid-19 lockdown, Bellah has been able to implement many of their recommendations, placing her in a stronger position now that she can return to her business full time.
Understand your business financials
“Bellah’s first priority was to pay herself a regular salary from her business every month so her debit orders don’t bounce, resulting in a bad credit record,” says Coulson.
With any business it’s important to treat yourself as an employee and pay yourself a monthly salary. Your salary is what you use to meet your personal expenses. Focus on living on this salary and not drawing cash from the business to meet your personal needs.
If you treat yourself as an expense in the business, you have a better idea of whether the business is profitable. You need to keep a proper set of accounts for the business.
This story is from the 25 June 2020 edition of YOU South Africa.
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This story is from the 25 June 2020 edition of YOU South Africa.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
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