How to Separate Yourself From Your Business

December 11th, 2023

Your business, heart project, work, service, and/or product may feel like it’s one and the same as you, or that it’s your baby. When you run your own business, oftentimes one of the most confusing aspects of the job -especially if you are new to the experience - is understanding how to separate yourself from your business. This issue can show up in so many ways, from achieving a work/life balance and managing your time, to how you get paid and even how much taxes you owe.

Here we’ll offer strategies for separating yourself from your business.

Don’t Mix Personal & Business Finances

It’s important not to mix or share business and personal accounts. To keep your business and personal expenses separate, your business entity needs its own bank account, its own credit cards, and it needs to pay you. You then always pay your personal expenses out of your personal accounts, never your business accounts. Whatever your business pays you will be subject to income tax and possibly payroll tax as well, though there are ways to significantly reduce your payroll tax obligation by choosing the right way to structure your business entity. Be sure to talk with us regarding how to structure your business for maximum tax savings, if you have not already gotten great guidance on that front. 

If you have already paid business expenses out of a personal account, or by using personal credit cards, keep careful track and document exactly how much you paid out from those accounts to your business. This payment will either be an investment in your business that you will want to track for the future, or it will be a personal loan to your business that you will want to eventually have paid back.

Talk with your CPA regarding how best to structure investments in or as loans to your business, and then we can help you properly document your decisions. Or if you need strategic support on this issue, contact us and we’ll look at all of your legal, insurance, financial, and tax strategic decisions together.

We offer a number of systems and processes that make keeping your personal and business finances separate a snap. Not only that, but we offer additional services that make separating yourself from your business as easy and convenient as possible. 

Get Clear On Your Actual Financial Needs & Goals

One of the best ways to effectively manage your business and personal finances is to first determine what you need your business to pay you at a base level, so you can pay all of your bills and other personal expenses, as well as meet your personal time and money goals. To get clear on this, we use a process called Money Mapping. If you haven’t worked with us on this yet, now is the time to finally get a solid understanding of how much money you actually need to reach your goals, rather than guessing or worrying about how much you need to earn to stay afloat.

We’ve Got Your Back

When it comes to separating yourself from your business and managing all of the different aspects involved with this process, you can count on us to provide you with the trusted support and guidance. With our help, you’ll learn how to do this in a way that not only ensures you are doing it right, but that actually adds value to your company and generates increased revenue. Sit down with us to learn about all of the different ways we can support you in this area. 

Contact us today to get started.

This article is a service of Ganvir Law, Personal Family Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a Business Strategy Session for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.