Profitable business. Poor financial management. Need advice for a new start.
I run a vintage street fashion business focused on rentals from my archive, sales, and related services. It is an S Corp. Over the past seven years, I’ve gained a significant amount of revenue, but I didn’t manage the business finances the way I should have.…
I run a vintage street fashion business focused on rentals from my archive, sales, and related services. It is an S Corp. Over the past seven years, I’ve gained a significant amount of revenue, but I didn’t manage the business finances the way I should have. I constantly mixed personal and business money, and over time that has limited my company’s growth. I’ve decided to start running the business the right way. I have a few large payments from a major project coming in over the next couple of weeks, and I’m treating that as a fresh start. I’ve opened a dedicated Chase business bank account and will be allocating every dollar into specific buckets: Operating Expenses, Business Savings, Owner Pay, Taxes, and Inventory. I’m looking at this as a new beginning and a chance to build the business on a newfound foundation. Any advice from people who have gone through a similar transition (or anybody at all) would be greatly appreciated. Thank you.
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I’m going to automatically allocate 20% of every dollar that comes into my business bank account into a separate tax bucket. What’s your opinion on that? Is 20% too low, too high, or generally appropriate? Also, what other things can i be doing tax wise to help my business? Especially with me being in California. Appreciate your response.
There is a lot, like home office deduction, s-corp reasonable salary, health insurance, QBID
Are you doing everything you can tax-wise? Specially in CA
Opening the separate business account is the right first move. The one thing I’d be careful about is treating it as a complete reset. Before those project payments arrive, export the statements from every personal account or card that carried business activity and gather whatever receipts you still have. A one-time cleanup/setup session with a California bookkeeper or CPA could help you start the new system without losing the history behind it. Because you both rent pieces from the archive and sell items, I’d specifically ask how those should be tracked separately. That may matter more than how many cash buckets you create. After that, keep the routine boring: one business account or card and a short review every week. Setting aside 20% is a useful temporary buffer, but deposits alone aren’t enough to know whether that’s the right tax amount. Are you already tracking each archive piece and what it cost, or mostly just the money coming in and out?