Starting a business is hard. You’ve taken a huge step in your life and moved away from the conventional way of making money and having a job. There’s no longer an annoying boss lingering over you – but the flip side of this is that you’re in charge of everything and it all feels so new.
Mistakes are bound to happen, and some will be a lot bigger than others. The issue many startup owners face is that they make seemingly small mistakes that snowball into massive problems. We’re going to talk about one of those today – it sounds fairly innocuous at first, but we’ll explain why it’s a massive error and how to avoid it.
Can you think of the mistake in question? We’re talking about mingling your personal life with your business and not keeping the two separate.
What does it mean if you mingle your personal life with your business?
This might sound confusing, but the concept is very simple. It refers to any instances where you’re mixing aspects of your “normal” life with your business. The most obvious example of this is getting paid by customers directly into a personal bank account and using funds from this bank account to finance your business operations. Another is to have clients or customers phone you on your mobile number, rather than having a dedicated number for your business.
Things like these should remain separate from one another. It might seem convenient to keep the two mingled together, but you’ll soon see why this is ill-advised.
Why you should keep your business separate from your personal life
Maintaining separation between these two key areas of your life is critical for a few massive reasons. Your immediate reaction is that this is an exaggeration and there’s nothing wrong with blurring the lines – well, you’re about to see why we take this so seriously…
- Separate finances legally protect your personal fund – Let’s say something happens and you’re sued by a client. Or, perhaps you had big ambitions and borrowed a lot of money to start your business yet now struggle to repay the debts. If all of this was done with your personal finances, you’re personally liable for the payments.
By contrast, if you set up a business and establish a proper business bank account, you’ve obtained legal protection. The funds are technically disconnected from you (the person) as they’re all linked to your business. If you don’t have enough money to make repayments from your business funds, your personal finances won’t have to take the hit.
- Improve your professionalism & brand image – Few things are worse for your professionalism than mixing personal things with your business. The biggest culprit of this is having a non-business number for people to call. If you’re handing out a landline or typical mobile number, it makes you look less impressive and credible. This can create a bad first impression, meaning you miss out on leads.
- Make it easier to manage your business – Arguably the biggest reason to keep personal and business things separate is that it’s so much easier to run both parts of your life. Managing a business is hard enough without having personal things get in the way.
For example, imagine trying to make up your tax return for the year and syphoning through your bank account. You’re looking for business purchases but need to avoid logging personal purchases. It’s so much harder and way more stressful; a business bank account means you only have to look in one place and you know every transaction is business-related.
The same is true of phone calls or emails. If you’re using the same mobile to talk to clients that you use to speak to friends, you’ll have loads of messages or voicemails to deal with. It’s even worse when you share an email client! Having separate avenues of communication means you know when something is for your business or personal life.
Simple tips to keep your business separate from your regular life
You’ve seen the importance of keeping these parts of your life separate and it’s much easier to do than people think. This is the secret to creating a profitable business as it’s easier to stay on top of things. You’re less likely to see a snowball effect where one thing leads to another and results in the eventual downfall of your startup.
These essential tips are all you need to follow and they’re super easy to implement:
- Register your startup as a proper business – Registering your startup as a limited company means it is a separate entity from you. Immediately, you’re personally absolved of any liability related to your business operations.
- Set up a business bank account – Every startup needs a business bank account. You usually get better rates on these accounts and they come with features to help you run your business. Most importantly, it’s now a lot clearer which transactions are personal or business-related.
- Use separate communication channels – This applies to calls, texts, emails, and any other communication method you can think of. WhatsApp Business is a great option here as you can enjoy the simplicity of WhatsApp while keeping business communications separate on your phone. Companies like YourBusinessNumber can help you obtain a separate number to link to WhatsApp Business, making life even easier. Opening a separate email account for your business is highly crucial too. For one, you can choose a more professional email address to improve your brand image. Secondly, you get the benefits of keeping all business emails away from personal ones.
That’s all there is to it; achieving a separation between these parts of your life is way simpler than you initially suspect. You have to live like this or you’re in danger of being bogged down by your business and feeling overrun as you try to navigate both lives while they mingle. Your business should be your business, and your personal life should be your personal life. Don’t mix the two if you want things to be a roaring success!