Protect Yourself; It’s Later than You Think

One of the benefits of working for The Man is that The Man is legally required to take care of you. If you live in Australia, in addition to your salary, he pays 9% into your superannuation, he gives you four weeks paid vacation per year and sick days. If you’re lucky, you might get paid some parental leave thrown into the deal, or some health care benefits.

When you’re a small business owner, you’re The Man or The Woman, and you’re responsible for taking care of yourself.

During skinny months, or those unfortunate months when an eagle flies off with your new, yet-to-be-insured lens, it’s easy to tell yourself you need to spend all your income on the business, and that you’ll put money into your safety net next month. There are always going to be other things to spend money on, and once you start making excuses for not saving, you’ll quickly find yourself with nothing put aside for a rainy day.

The reality is that if you want to run a serious business that’s going to be a viable source of income for you and your family now and when you’re old, grey and retired, you need to be disciplined about saving today. What’s the point of starting a business to do something you love if it means you have no security? Without security, doing what you love won’t seem like any fun.

The key is start saving and develop discipline early. Think about what benefits you want for yourself. At a minimum, you should have a superannuation fund and squirrel away 9%, which is standard. What about vacation pay? An emergency fund for new equipment? Separate out the savings that are for you, and those that are for your business. Here are some examples of things you may want to save for:

Personal Business
  • Superannuation ì 9%
  • Vacation pay ì four weeks’ salary
  • Sick days ì two weeks’ salary
  • Parental leave ì three months
  • Healthcare
  • Capital expenditure account (for new equipment)
  • Bad or slow debts
  • Safety net for quiet months

Having cash set aside will give you security and peace of mind so you’re not forever chained to the next assignment and always worried about those thieving eagles.

Pilar Mitchell

Picture: Pilar Foss When she’s not writing her blog, Cult of Clothes, Pili is a corporate advisor working with businesses of all sizes, from start-ups to stock-exchange-listed companies. She is fascinated by the evolution of small businesses and loves to combine her passion for writing with the opportunity to help entrepreneurs grow and learn.

Written by

Kain is a co-founder, creative and marketing director at Fotomerchant. You've probably seen his template designs, blog posts and video content. His photography website is home to a collection of lomography, instagram and experimental photography.

  • JD

    This is sound advice. JD/Adelaide