Taking the plunge to become self-employed is something to be proud of. This choice is made for many reasons; it may be that you’ve had a great idea that you want to bring to market or the appeal of flexible working hours or even the draw of making money for yourself. Unfortunately, all of the benefits of being self-employed are not without their drawbacks. While making your own money is very enticing, being self-employed means that you are responsible for handling your own money too, unless you choose to hire an accountant which can be quite a large expense. You have to have a grasp on how to budget and manage money, any mistakes that you make can end up costing you dearly.


There is a reason that larger companies have a whole department dedicated to finances and budgets, it can be time-consuming and even confusing at times. Once you have grasped the basics, you can build on them. How much money do you need to run your business and how much business do you hope to get? Consider how much money you think you’ll bring home at the end of each month.

Looking over last year’s figures can help you to plan for the year ahead. It always prudent to underestimate how much income you are expecting and overestimate how much you intend to spend, this will go some way toward keeping your cash flow balanced and stable.


Make a note of every expense, no matter how small. Prioritise this list from essentials to “luxuries”, this will give you some perspective on your outgoings. Writing a list like this helps illuminate any areas where you are spending money, for example, you may be paying for advertising for which you are getting no return, or you are paying for a subscription that you may no longer use.

Credit reporting

If you trade with a lot of other businesses, then consider carrying out a credit report on your clients. Late payments can be hugely damaging to a business, especially if you are self-employed, one late payment can wipe you out. A credit report can give you an insight into a client’s payment history, and if they pay their bills on a reasonable time scale, a credit report can save you from months of chasing payments. At Commercial Domestic Investigations, we can give you the peace of mind that you need to trade confidently with your clients.

Keep personal and business separate

If your business begins to struggle, it can be tempting to subsidise it with your personal finances instead of identifying the problem and trying to fix it. Similarly, you may begin to use your business’ money to spend on personal needs. This can cause havoc with your accounts and can be a major problem when it comes to completing your tax return. The simplest way to avoid this problem is keeping your business and your personal finances separate.