Watch the recorded training session from 27 Jan 2024 HERE
Read: ROBERT D. HALES “God expects us to help solve our own problems. . . . We are thinking, reasoning human beings. We have the ability to identify our needs, to plan, to set goals, and to solve our problems.” Every Good Gift, New Era, Aug. 1983, 8, 9
Discuss: “Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up.” (Galatians 6:9) Why does God sometimes let us struggle to find answers or solutions to our problems?
REPORT TO THE GROUP
○ What did you learn from using an income and expense log and creating a business income statement for your own business?
SEPARATING MY BUSINESS AND PERSONAL MONEY
Video: Separate-personal-biz money-self salary (below)
Discuss: What do we learn from this video about keeping our business money separate from our personal money?
Read:
- Pay yourself. As your business begins to earn money, you need to decide how to pay yourself. Many business owners start by paying themselves a small salary, which can increase as the business grows and becomes financially stable.
- Keep separate bank accounts. The money you pay yourself should go into your personal bank account. This account should be separate from your business bank account.
- Don’t rob your own business. Successful business owners do not take money from their business bank account to give financial help to family or friends.
Video: Water-business-separate personal – biz records (below)
Read: Let’s practice separating our business and personal money. For the following example, imagine that you have a business that sells drinking water.
Read: Successful business owners understand that they need to save money for emergencies. Problems or difficulties will happen and savings will be needed. When considering helping someone financially, we should use wisdom to determine reasonable limits and conditions. We should rely only on extra personal resources and should never use business funds. Above all, we need to make certain that our business is a “house of order” (D&C 88:119).
PAYING TITHING ON MY INCOME
Read: We receive great blessings from paying tithing on our income. If we keep our business money and personal money separate, it’s easier to calculate our tithing.
Remember these principles:
1. Keep business and personal money in separate bank accounts.
2. Pay tithing on personal income (your self-salary) that you receive from your business.
3. Money in your business is not tithed. You should use that money to pay for business expenses, salaries, and business growth opportunities.
KEEPING SEPARATE RECORDS
Read: In addition to having separate bank accounts for your personal and business money, you should also keep separate records. Mark Bailey keeps daily records of all the money that comes into his business and all the money that goes out. He also keeps daily records of all the money that comes to his family and all the money that goes out. These records are called revenue and expense logs (for business use) and income and expense logs (for personal use)
Facilitator: We have been learning about keeping our business money separate from our personal money. Now let’s review this with Trenton, who is a locksmith. He makes 100 for unlocking a vehicle. That’s business revenue. Once a week he goes to lunch with his best friend, Charlie. That’s a personal expense. On his way back from lunch, Trenton occasionally buys a box of blank keys. That’s a business expense.
A list of Trenton’s daily activities is provided below. As a group, take turns reading each line. Discuss where to enter each item in Trenton’s Revenue and Expense Chart below the list. Decide if each item is a business expense, business revenue, a personal expense, or personal income. Afterward, check the answer key on the following page.
Trenton’s Daily Activities:
- Unlocked 2 vehicles: earned 200
- Bought lunch with Charlie: spent 10
- Bought 30 blank keys: spent 30
- Paid for 5 deadbolt locks: spent 40
- Made 15 new keys: earned 45
- Installed 2 deadbolt locks: earned 300
- Paid house electrical bill: spent 120
- Paid personal cell phone bill: spent 80
- Purchased gas for work van: spent 50
- Bought pizza for son’s baseball team: spent 90
- Provided after-hours customer roadside help: earned 150
- Paid himself a salary: 1,200
Answer Key:
We can add up the columns in our business account and see what our revenue and expenses are for the day. We can do the same for our personal account. It’s easy to subtract our expenses from our revenue to determine our business profit—or loss—for the day. Do this for a week and see what you learn about your own business. Then you will be able to answer these questions about your own business:
- Did your business make a profit? Is there enough money to make improvements to your business or save for the future?
- Are there opportunities to increase revenues or reduce expenses, allowing you to increase your salary in the future?
Discuss:
○ What aspect of separating the business and personal money seem most challenging?
○ What can you learn from these business and personal charts?
Read: Successful business owners keep daily records and use them to make informed business decisions. While many business owners don’t enjoy keeping records, they make it a habit and a priority because they know that having accurate revenue and expense information will help their business succeed and grow.
We will work hard this week to keep separate accounts and to avoid the common mistake of getting so busy with business tasks that we get careless with critical, daily record keeping.
MY COMMITMENTS
Ⓐ I will pay myself a salary or wage and keep my business money in a separate account from my personal money.
Ⓑ I will keep separate records for my business and personal money.
Ⓒ I will continue to use a revenue and expense log every day to track the sales and expenses from my business or the test products I am selling to learn more about the market and customers I plan to serve. Use the template below.
HOMEWORK:
