A simple but powerful move to take your side hustle to a “real” business (that might surprise you)

Got a side hustle that you want to make a “real” business? One of the most important steps you can take is actually quite simple, and it’s one that many entrepreneurs and business owners overlook. And it comes down to a question that I get all the time…

Do you have to separate your business and personal expenses?

Now, stay with me here, and I’ll explain why this question means everything when it comes to growing your business. Let’s start with answering it.

Legally, you don’t have to separate your business and personal expenses. But it is a crucial step if you want to go from a side-hustle to a full-time business.

So is something this simple really that significant to growing your business? The answer is YES, and I’ll show you why.

Now, first of all, let’s talk about what “separating your business and personal expenses” actually means.

It simply means that you have a designated place for income from your business to land. This could be a dedicated business bank account, PayPal account, etc. It also means that you cover business expenses using designated means, like a dedicated business credit cards.

In other words, it’s simply keeping the money that you receive from your business and the money you spend for your business separate from personal accounts.

But do you legally HAVE to do this once you start your business? The answer is NO.

It’s not illegal if you don’t separate your business and personal expenses. You also don’t have to do this to create a business entity (like an LLC), get an Employer Identification Number (EIN).

So why should you separate your business and personal expenses if it’s not legally required?

You don’t have to separate your business and personal expenses. But it will save you a lot of time, energy, headaches, and money in the long run if you do.

This is especially true if you want to make your business a full-time thing. And it doesn’t take long for most entrepreneurs to realize this, too.

A while back I hosted a QuickBooks online training workshop, and nearly all the participants hadn’t started separating their business and personal expenses yet. It didn’t take long for them to realize how much time, energy, and work it took on the back end.

We’re talking about going through all their accounts, bank accounts, credit cards, processors like PayPal. Weeding out all business income and expenses, one step at a time.

Going through all your expenses like this can turn into a nightmare. My participants found that out fast!

Now, why is this so important if you want to grow your business? Because a profitable business is built on a foundation of solid and accurate accounting. It’s the key to streamlining your taxes, taking control of your cash flow, and scaling your business.

Not to mention the time, energy, and frustration it will cost you to separate out all your income and expenses the long way. It can also cost you money, especially if you hire a bookkeeper to do it all for you!

Then, there’s the potential for bookkeeping errors and tax mistakes, which can be a nightmare unto itself. That’s one that NO business owner wants to deal with.

All this matters if you’re envisioning a future for your business, even if it’s “just” a side hustle right now.

So if you’re serious about building a sustainable and profitable business, you need to get serious about what you need to do to get there. And giving your business the foundation it deserves is job one.

That all begins with separating your business and personal expenses NOW.

Now, if you haven’t started doing this now, don’t worry! It’s not a legal requirement, and you’re not doing anything wrong if you don’t.

BUT, if you’re serious about growing your business, do yourself a favor. Make your business official. Treat your business like a business, and start focusing on growth. Doing something as simple as opening a business account is a MAJOR first step to creating the business you dream about!

AND…it saves you all kinds of bookkeeping frustration and potential mistakes at tax time. That peace of mind alone is priceless.

(AND One more thing…just as important as all we’ve talked about here is that you as the business owner PAY YOURSELF FIRST. So once you separate your business and personal expenses, next up is to determine how you pay yourself in your business. I talk about the best options to pay yourself first in your business right HERE.)

Now, have you started separating your business and personal expenses yet? Do you plan to?

Let me know HERE!

Until next time…

Love, light, and MONEY, Honey…

Kaylee

P.S. Moving from a Side Hustle to a business takes a lot of shifts, and one of the most important ones is your MINDSET.

If you’re ready to take your Money Mindset from side hustle to full-time entrepreneur, my FREE Mini Course will help you create that mindset to get you there!

Get instant access to RESET YOUR MONEY MINDSET right here, and start creating the structure and the mindset to take your business adventure to the NEXT level!

AND…did I mention it’s FREE? 😉