Overwhelmed by Business Finances? The First 3 Steps to Take Today
First, take a deep breath. The feeling of being overwhelmed by your business finances is a signal, not a failure. It simply means you're ready for a new level of clarity. To get there, you need a simple, immediate plan.
Here are the first three things you should do today to regain control:
- Open a separate business bank account.
- Tally all income and expenses for the last 90 days to find your baseline.
- Calculate your estimated tax owed.
These three actions will create the immediate clarity you need to move out of financial chaos and into calm confidence. Let's walk through each one together.
Frequently Asked Questions
What is the very first step I should take if I'm overwhelmed by my business finances?
The first and most powerful step is to open a separate business bank account. This creates a clear separation between your personal and business finances, which is the foundation for gaining mental clarity and simplifying tasks like tracking expenses and preparing for taxes.
Why should I look at only the last 90 days of my finances instead of a full year?
A 90-day period is recommended because it is more manageable and less overwhelming than analyzing a full year. This shorter timeframe provides a recent and relevant snapshot of your business's income, expenses, and average monthly profit, giving you the data you need without causing paralysis.
How much money should I set aside for taxes?
As a general rule of thumb for solopreneurs, you should aim to set aside 25-30% of your net profit for taxes. The article suggests starting by calculating 30% of your last 90 days' profit and moving it to a separate savings account.
Step 1: Create Separation and Clarity with a Business Bank Account
The first and most powerful step is to draw a clear line between your personal and business finances. Commingling funds is the primary source of financial confusion for solopreneurs.
Why This is Your First Step
A separate business bank account is the foundation of a healthy financial system. It isn't just about being professional; it's about giving yourself mental clarity. When all business money flows into and out of one dedicated place, it becomes infinitely simpler to track business expenses and simplify tax preparation. It turns a tangled mess into two neat, manageable piles.
How to Do It Today
You can do this right now. Most modern banks allow you to open a business checking account online in under 15 minutes. All you typically need is your business registration information (like your EIN or Social Security Number if you're a sole proprietor) and a small opening deposit. Don't overthink which bank to choose—just choose one and get it done. The act of creating this separation is more important than finding the "perfect" account.
This simple action is a core part of the Sovereign Three™ framework we use in The Empower & Grow Journey Membership. It's the first step in helping you Claim Your Rhythm—creating a business structure that protects your energy instead of draining it.
Step 2: Establish Your Baseline with a 90-Day Snapshot
You cannot make informed decisions about the future without understanding the recent past. The goal here is not judgment; it's gentle visibility. You just need to know your numbers.
Why You Need a 90-Day Snapshot
Looking at a full year of finances can feel paralyzing when you're already overwhelmed. A 90-day period is more manageable and provides a recent, relevant picture of your business's financial activity. This snapshot will show you exactly how much money is coming in, where it's going, and what your average monthly profit truly is. This is the data you will use to build a sustainable plan forward.
How to Tally Your Numbers
Gather your bank and credit card statements from the last 90 days. Open a simple spreadsheet or use a notebook.
- List all income: Every payment you received. Total it up.
- List all expenses: Go line by line and categorize every single business expense. Common categories include software, marketing, supplies, and professional fees. Total it up.
- Find your baseline: Subtract your total expenses from your total income. This is your 90-day profit. Divide it by three to see your average monthly profit.
You’re not alone in this—the Journey community was built for exactly this kind of work. Inside Journey, we use a simple tool to help you apply this without overwhelm, providing a safe and nonjudgmental space to Know Your Numbers and make peace with your financial picture.
Step 3: Face Your Tax Obligations
Many business owners treat profit as their take-home pay, only to be hit with a surprise tax bill later. This final step helps you shift your perspective and remove the fear of the unknown.
Why Taxes Come Before Profit
Taxes are not a penalty for success; they are a predictable business expense. By estimating what you owe now, you move from a place of anxiety to a place of empowerment. You can begin setting aside money with every payment you receive, ensuring you are always prepared. This single habit protects your future peace of mind.
A Simple Way to Estimate Your Tax
Using the 90-day profit you just calculated, you can create a rough but effective estimate. A general rule of thumb for solopreneurs is to set aside 25-30% of their net profit for taxes.
Your 90-Day Profit x 0.30 = Your Estimated Tax Owed
This isn't a perfect calculation, but it is a responsible starting point. Open a separate, free savings account and transfer this estimated amount into it. Going forward, get in the habit of transferring 30% of every payment you receive into this "tax" account.
This practice is part of how we teach members to Hold Your Shape within The Empower & Grow Journey Membership. By creating strong financial boundaries and systems, you build a business that is resilient, sustainable, and free from financial anxiety.
You've Taken the First Steps. What's Next?
Completing these three steps is a monumental achievement. You have replaced overwhelm with action and confusion with clarity. You have built a solid foundation.
Now, the key is to build consistent practices upon this foundation. This is where having support, structure, and the right tools becomes essential. If you’d like a safe place to explore this more deeply, that’s exactly what we do inside The Empower & Grow Journey Membership.
Journey is a financial clarity and business mentoring community designed to help you:
- Gain Confidence: Use our library of simple digital tools and templates to manage your finances with ease.
- Find Your Rhythm: Participate in monthly workshops and Q&A circles to build systems that match your energy and values.
- Feel Supported: Connect with a warm, nonjudgmental community of fellow solopreneurs walking a similar path.
- Receive Gentle Guidance: Learn a sustainable approach to business growth without the pressure to hustle or perform.
You have already proven you can take the necessary steps. You don’t have to take the next ones alone. You’re not behind; you’re just ready to begin in a new way.
Letters from the Field
Weekly reflections for solopreneurs walking a gentler path.