How to separate personal and business money
Many entrepreneurs are familiar with the stressful situation when there is not enough money to run a business or meet personal needs, especially if the business is just starting to develop.
To grow a business, you have to take emergency reserves from your own reserves or, conversely, withdraw funds from circulation for your own needs. In order to leave constant transfusions and the stress associated with them in the past, you need to learn how to properly separate personal finances from business money. Roman Titov, head of Delta Capital, also speaks about this, believing that for a small entrepreneur it is natural to combine his own money and the organization’s finances in one wallet. However, at a certain stage, one has to give up this habit, like many other “confusions”: rights and responsibilities, personal relationships and relationships in the hierarchy, etc.
An entrepreneur who is unable to “divide” cannot “rule” and remains at the bottom of the business community.
What to do for separation
Even a businessman who consciously came to the idea of the need to separate personal and business money initially experiences difficulties, primarily psychological. But. Having decided to divide the budget, you should remember that the end result of the efforts undertaken will be the disappearance of difficulties associated with the constant transfer of money from business to personal budget and back.
According to Alexey Batylin, founder and CEO of Activity Group, it is extremely difficult for an entrepreneur to separate business money and personal finances. In particular, at the level of one’s own consciousness. But if this is not done, sooner or later such “general accounting” will result in serious problems.
So, the first thing a businessman needs to do is start following some rules:
#5 Don’t look for someone to blame
Success is a common achievement, failure is also common. Even if there is a leader who is responsible for the result, or someone in particular messed up. This means that they underplanned, underdiscussed, and underestimated the risks. We need to correct the mistakes and take measures to prevent them from happening again.
At some point, due to a purely human factor, we messed up with the supplier and lost the purchase discount. They paid for the goods, but they couldn’t pick them up when we agreed. And then they couldn’t do it again.
There was a culprit, and it was possible to make a big deal out of it, but we talked and came to several conclusions:
- A quarrel will not eliminate the cause of the problem: we still will not return the discount.
- We messed up not because the culprit stupidly neglected to work, but because he was busy with other things. In fact, some turned out to be not so important: some of them could be neglected altogether, and the rest could be postponed until later.
- Losing a discount is a nuisance, but not critical. You can reconnect with the same supplier and return the discount, or focus on working with another.
- According to the results:
- We began to plan things better and set priorities.
- We found another supplier, which in fact turned out to be even more profitable.
But there are two of us. The more people, the more difficult it is.
It’s impossible to put the brakes on problems that affect everyone. Is it contagious. Today one messed up, they kept silent, tomorrow another will do the same. As a result, the jamb either turns into the norm, or a problem arises: “Why is X allowed, but I’m not?”
But if you work with friends, you don’t need to express it in front of everyone either. Someone will stand for one, someone for another, and a showdown begins in the spirit of “But you are this - And here you are that.” Or it turns into an all-on-one attack. Both are abnormal, and no one knows how they will turn out. You conduct an educational conversation in private, calmly explain the problem and why you can’t do that.
It used to happen that a person took criticism personally and became offended. I had to explain that I scold only for work reasons, friendships had nothing to do with it. It's difficult.
Ilya Petrushkin
Take a percentage of the company's income
To separate personal and business money, constantly withdraw a certain percentage of the company's income. A business will always require an infusion of funds necessary for development, especially if the enterprise is recently founded. However, it is worth remembering that the primary goal of creating any private enterprise is to make a profit for its creator.
Confiscation should be made carefully. According to Natalya Khot, a consultant on financial security, taxes and optimization, an accountant, the ideal option is to separate what is personal and what is in business - payment of salaries and dividends from the company’s activities. At the same time, you should remember the words of Yulia Solodyashkina, a financial coach, who warns that you should never withdraw from your business an amount greater than your net profit unless absolutely necessary. And do not touch the advances received! It is better to transfer money from the “business compartment” to the “personal finance compartment” not chaotically, but periodically (for example, once a month or quarter).
Learn Financial Management
To effectively and correctly separate personal and business money, study financial management, which allows you to understand the theory of saving and gain the ability to manage money. The need to understand this science is emphasized by the head of the online English language school EnglishDom, Maxim Sundalov, who claims that there is a clear distinction between where the company’s finances are and where my personal money is. This is all normal financial management, which does not allow mixing business and personal.
Maintain Discipline
Personal money and business money require organization. That is why you must introduce strict discipline for the company’s employees and adhere to the established rules yourself. This is what many successful entrepreneurs do, for example, Pavel Spichakov, managing partner and Bergus, who claims that the company must have a budget for at least three months. And everyone is obliged to adhere to it. And the leader himself, first of all. I personally, as an employee, receive my salary the same as other employees of my companies, twice a month, and I can never ask for anything extra. I also account for gasoline for business trips, for business trips, like other employees, I submit all receipts and tickets to the accounting department.
Another famous person, Dmitry Kibkalo, the founder of the international network of board games Mosigra, shares the same opinion, saying that if you want your employees not to mix the personal with the public, you need to start with yourself. And be the utmost pedant in these matters. I meticulously record all the expenses that I make as the head of the company, including the most insignificant ones. I can “protect” every penny, what exactly it was spent on.
Businessmen who decide to separate personal finances from business money should get into the habit of creating two separate estimates: one to control personal expenses and one for business. Kirill Mamatov, founder of the company first-hr.ru, also speaks about this, believing that it is necessary to initially build two budgets for income and expenses.
One personal one, to understand how much money we need for all our “wants”. Let me emphasize that the budget is INCOME and expenses, otherwise many do the opposite - this is not necessary. We build the second budget for the company, where we insert our money into the expenditure side, which the company we founded will pay us.
It is also worth following the advice of the founder of the Russian America company, the initiator of the Second Passport project, Yuri Mosh, and to avoid temptation, create separate accounts for business and personal finances. I receive payments from clients on a business card, from which I pay taxes and employee salaries, and pay other expenses. And from it I pay myself a “salary” on my personal card.
Reasons for the need to divide property between the founders
The division of property between the founders is a multi-stage process that occurs as a result of certain circumstances. Most often it is a consequence of:
- Liquidation of the company;
- Divorce of spouses;
- Withdrawal of the founders from the enterprise.
The circumstances resulting in the division of property between the founders determine the course of the procedure; in addition, the participants of the event take into account the requirements of the law. To avoid violations of legal norms, it is better to use the services of professionals during the division process.
Personal financial plan
A special tool for monitoring personal cash inflows and outflows is a special estimate. It takes into account the needs of the entrepreneur. Acting as expenses, as well as current financial capabilities, the calculation of which is carried out on the basis of income received personally by the businessman, and not by his company. The latter item usually includes the executive's salary, as well as dividends received from the individual's share of the firm.
Formation of a personal plan consists of several stages:
1. Setting goals, dividing them into categories of value and deadlines. 2. Analysis of current income. From the resulting figure, you should subtract the amount of monthly maintenance, that is, money that goes away regardless of the completion of the assigned tasks. 3. Analysis of existing personal assets, that is, the “safety cushion” from which you can extract money in an emergency. The likelihood of risks occurring should also be calculated. 4. Cash flow forecasting. At this stage, both the possibility of increase and the probability of decrease are calculated.
The analysis will allow you to create a clear picture of available income, as well as find out what funds are currently needed for.
If the founders are spouses
According to the RF IC, divorce presupposes the termination of the marriage, in the process of divorce, according to Art. 34 everything acquired together is divided. The same applies to shares that were acquired in the process of living together.
The value of shares for the division can be used nominal or market. Since the nominal value usually does not exceed 10,000 rubles (formed on the basis of the amount of the authorized capital), it is recommended to use the market value, which is higher than the nominal and lower than the actual price, it corresponds to the real price for the current day.
Typically, spouses reach a common denominator in the process of division through negotiations, then the agreement is signed and notarized.
If it is not possible to reach an amicable agreement, the division of property is carried out in court.
Options for dividing property between founder-spouses
- Division of property into two equal parts in natural size - the agreed part is transferred to the spouse, after which he has the right to become a founder, but after observing certain formalities and entering data into the Unified State Register of Legal Entities.
- Payment of compensation to one of the spouses, while the other remains the founder - this option is more popular than the previous one. When using it, the real value of the share is taken into account, based on the balance sheet data or valuation of the enterprise’s property.
Please note: compensation paid in the agreed amount, not exceeding a share, is not subject to income tax for individuals.
Foreclosing on the share of the founder-spouse upon division of property
It happens that the parties accepted the option with compensation for execution, but the spouse who assumed these obligations does not fulfill them. Then the spouse awaiting payment has the right to foreclose on his share to receive compensation if the company lacks other property.
These plaintiff’s demands can be satisfied in several ways:
- The LLC reimburses the real value of part of the expected share, and subsequently the share transferred to the organization is sold in accordance with the law;
- The real value of the share is compensated by all participants of the company by unanimous decision in the amount corresponding to their contributions to the common capital, unless there are other established rules;
- If none of the above options for reimbursement is used within 3 months, the share is sold at a public auction.
It follows that when dividing property between spouses, the share of the founder of the LLC is divided in equal amounts or compensation is paid in the established way.
