the complete guide to small business finance
by guest contributor Carrie Friedberg

Congratulations!  You’ve made the decision to fulfill your dream and start your own business!   Before you jump in head first, there are many important factors to consider from a financial perspective.  Here is my strategy for planning for financial success in your new venture:

1. Keep a bridge job.

It’s critical to continue being able to pay your bills and live your life while you start a business. It is possible to maintain low to no overhead in the beginning. Before rushing out to rent the beautiful corner office on your favorite block, consider paying zero office rent for a while at coffee shops, in hotel lobbies or on your kitchen table.

[Tweet “When starting a new business, it is possible to maintain low to no overhead in the beginning. – @Studio41PR”]

2. Capitalize on free marketing.

Business cards are your portable website. Make them as clear and memorable as possible. It should be very obvious what you do, who you are, and how to contact you. Use a simple tagline if you like. Don’t leave your contacts guessing. Start with anything basic, no need to get paralyzed by decisions about colors, font, logo or language. I use mini-cards from and hear, “Ooh, these are cool!” every time I hand them out. Attend networking groups as a guest. Consider Business Networking International (BNI) or contact your local chamber of commerce or nearby schools and universities to see what events are happening. Hone your elevator speech. You should be able to state what you do and who you work with in under 30 seconds. Have a website. Even a one-page brochure site will do. In the beginning, I made my own website on iWeb. I called it Version 1.0.  Trust that in time, your business cards and website will grow, develop and expand just like you will as a small business owner. Remember to look in obvious places for free marketing. Set up a Facebook business page, Twitter account, update your Linked In profile, and create Yelp pages – I have one on both coasts. There’s always Google Plus, Pinterest, and You Tube, if those apply. Tell everyone you know what you’re doing now. I got a long-term client once by posting my business card on the community bulletin board at my local coffee shop. The cost? One decaf latte.

3. Start with practice clients.

Meeting for coffee marketingYour family and friends are your primary network. They already like, trust and respect you. Ask around or send a mass email about needing practice clients and that you’re offering a reduced rate for a limited number of people. People love exclusivity and a great deal and it’s very important to give yourself some time and space to practice. With practice clients, you can work on building fluency and confidence, edit your intake form and 1st appointment script, discover questions you didn’t know you had, and most importantly be okay with making mistakes. I worked with practice clients for several months before I officially opened my doors for business.

4. Make quarterly estimated tax payments.

Not doing this is one of the biggest mistakes new small business owners make. You have to put money aside into a separate savings account that is only for taxes the moment income starts flowing. I use Capital One 360 for their high interest rates and to keep my tax savings protected and separate from my regular bank. Talk to your accountant about what percentage is right for you to put aside but, it will probably fall somewhere between 20-30%. pay your taxes

When I started my first business, a tutoring company, I sent money to the IRS and California state every month in order to get the hang of paying taxes on my own. You may be a person who can save and sustain tax savings all year long and make one lump payment in April, now that’s discipline!

5. Have a budget.

You’ve got to have a financial plan, it’s actually serves as your business plan and must include periodic (non-monthly) expenses. I also suggest having a coffee and lunch budget so you can network, buy lunch for a mentor and spend time with friends and colleagues asking questions and discussing your business ideas.

6. Separate your business and personal finances.

You don’t need to open an official business checking account at your bank, in fact, if you do you’ll automatically be placed on a ton of mailing lists and the business junk mail situation is pretty bad. I suggest opening a regular additional checking account. Don’t get overly excited about “writing things off.” You still have to pay for your business expenses so it affects your monthly cash flow. Of course, it’s essential to have a good accounting system of all potential business deductions. I use the Money Minder, which is a huge improvement from my old system of collecting receipts in boxes.

7. Avoid using credit cards.

Research shows that people tend to overspend by 23% simply by using a credit card. Credit cards can be a slippery slope for small business owners. I understand it sometimes takes money to make money, but do not spend on credit without a clear, grounded plan for paying it back within a timeframe you can live with, and do the math ahead of time to understand the cost of impending interest payments.

8. Be comfortable with your rates.

charge at the topSetting rates is an intuitive, internal process. Potential clients will read your face, body language and voice, even over the phone, and be able to sense any desperation or nervousness. Be sure not to undercharge. No underearning or working distraught with resentment allowed. During sales conversations, place both feet on the ground and take deep belly breaths. Since you’re your own boss, you need to remember if two years have gone by since your last raise, it’s time for a review.

BONUS: 7 Reasons to Charge at the Top!

My business coach Mikelann Valterra taught me seven reasons to feel confident charging at the top.

  1. Education – This should include all degrees, credentials, certifications, professional development, and training.
  2. Experience – Review your work history carefully and acknowledge in-industry or related experience.
  3. Referrals – If your business if largely driven by referrals, well, that’s awesome and enough said.
  4. You know you’re getting results. If you’re not sure, take branding expert Laura Garnett’s advice – ask for testimonials from some of your favorite clients. What do you enjoy the most about working with me? What do you see as my greatest strength? How does working with me affect your life?
  5. You provide a specialized service. Do you have a clear niche? I’m a holistic money coach. Some people work exclusively with athletes, women, LGBT, city dwellers, etc.
  6. Your business is very professional. You know if this applies to you and includes your website, cards, the way you dress, and your overall professionalism.
  7. You ask for it. This is my favorite reason to charge at the top. Remember, you must be at ease inside and out. Go for it!


Last week, in our Female Entrepreneur Series as part of our Fresh Ideas for Creative Marketing podcast, I interviewed Carrie Friedberg, a certified financial counselor.  Carrie has owned her holistic money coaching practice since 2010, based in both San Francisco and Manhattan.  Carrie has been featured in Forbes and US News, and on Brett King’s Voice America Radio Show. Carrie’s blog, SF Money Coach, is very popular and she has clients on four continents!  Listen to our Finance for Female Entrepreneurs podcast here.