I got this advice from a stylist who has 10+ years’ experience and I am so glad I listened.
I put every single penny into my business account, tips included. I write myself a check every two weeks as my “payroll” check. I deposit that check into my personal account and pay all of my personal bills with that. I pay myself just enough to cover personal bills with just a little left over for personal spending money. If I have money left over in the business account at the end of the year, I either leave the money in the account to help with slower times of the year or I buy business-related supplies to ensure I have what I need to service my client base.
I pay my booth rent, supplies, and anything else associated with my business out of my business account. I do not deviate from that plan. I pretend that business account is not there, except on pay day. It’s important to me not to use my business account for personal purchases. I don’t even carry my business credit card or checkbook with me to avoid overspending. Everything is black and white; your accountant will appreciate you so much for making things simple.
— Paula Applewhite, Paper Rock Scissors; Salon, Spa and Gallery, Southern Pines, N.C.