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Separate Personal Finance from your Business

Mastering financial separation anxiety: separate your personal finances and lives from that of your business.

Liz Zambonini




I have been running The Hope Factory for over a decade, and the entrepreneur programmes we have run, have provided valuable insight into the challenges faced by emerging entrepreneurs.  Challenges I, myself have faced in building my organisation. Regardless of the varying types of businesses that entrepreneurs operate, the challenges that they face remain the same. One such challenge in the startup phase is separating their personal finances from that of their business, a predicament I am all too familiar with.

The Hope Factory started in a Garage with no startup capital. I spoke at a Women’s Day conference and got volunteers to assist and the first R3000 cost I took off my credit card. We used the ‘Boot strap’ method, and basically spent what we had before we had it, which was the opposite way to which one would ideally like to work!

However after the first six months of running the organisation and going through my first annual financial statements, I realized how complicated it was trying to retrospectively sort out the finances, so I had to put some clear boundaries in place.

Here are a few useful tips on how an entrepreneur can separate their personal finances and lives from the finances of their business:

Open a separate bank account. Many entrepreneurs starting their business find it simpler to use their personal current account to do business transactions. The problem is that with personal debit orders going out and ad hoc withdrawals, an entrepreneur may be unable to gauge how their business is doing.

Also there is the risk of spending more than the business is generating which means that an entrepreneur may run out of cash to pay creditors or will not have any reserves to plough back into their business, ultimately limiting the growth and success of the business.

For entrepreneurs starting out, opening a business bank account might not be an option from a cost perspective, as business accounts tend to incur higher bank charges.  And if you have just taken a plunge into entrepreneurship, you will want to keep unnecessary expenditure to a minimum. If this is the case, it may be worthwhile opening a savings account, or a separate personal account to do business transactions from, until you are ready to make the move to a business account.

Pay yourself a salary. In order to successfully separate their personal finances from the finances of their business, entrepreneurs need to view themselves as an employee of their business and pay themselves a salary. At the end of the day, food needs to be put on the table, and bills need to be paid. If an entrepreneur has a monthly income from their business, then the temptation to dip into the business funds to cover personal expenses will be reduced.

Draw up a budget and stick to it. Starting a business can often mean a difficult financial adjustment until the business is up and running. Entrepreneurs need to be realistic about how much income they are going to generate and whether they can support themselves and their lifestyle.

A business may have a high turnover, but that does not necessarily equate to high profits. Entrepreneurs need to draw up a budget and stick to it. This requires discipline when it comes to living within your means, especially if your previous source of income came from formal employment, where you were paid more than you are currently earning in your own business.

Keep detailed records of all income and expenditure. Keeping receipts, and recording amounts spent and amounts brought in, will give an entrepreneur a true reflection of how their business is progressing. This includes keeping track of “hidden costs”, such as fuel, mileage and car maintenance for your personal vehicle which you use for your day to day business activities.

Although this may not seem important, this information becomes critical in making business decisions. For example, we worked with an entrepreneur who was too scared to employ someone, and too scared to open a cell phone account, and instead, used to pay contractors at double the price. Once we sat down and looked at her monthly expenses, and did a simple cash flow for the year, she realized that she would easily be able to afford both and, and greatly improved her profit by doing so.

Be accountable. Ultimately the success or failure of a business depends on the entrepreneur. I have observed the difference it makes to have a mentor to hold an entrepreneur accountable for making sure things are done the right way in their business. In formal employment employees are accountable to their boss to do their job well.

Unfortunately when starting your own business, if you have no one to hold you accountable, there is a risk that certain aspects of your business will be neglected. Entrepreneurship can be a long and lonely road, and a mentor can provide fresh perspectives, ideas and solutions which you may not have thought of. Entrepreneurs starting out would do well to find a mentor, who amongst other things could hold them accountable for managing their expenditure.

Liz Zambonini is the CEO of The Hope Factory, an established Enterprise Development Initiative of the South African Institute of Chartered Accountants (SAICA). For more information, visit

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Personal Finance

(Infographic) The Financial Advice Millennials And Gen Zers Want To Know

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.




Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.

In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.

Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.

According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.

Related: 7 Critical Things Your Financial Advisor Must Meet

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.


Related: Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice

This article was originally posted here on

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Personal Finance

14 Ways To Make Quick Cash On The Side

If you need money quickly, here are some solid ideas.



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Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?

Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.

If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.

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Personal Finance

Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges

Why should financial democracy matter to entrepreneurs?

Etienne Nel




Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.

What is financial democracy, exactly?

It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.

Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.

For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.

In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.

That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.

What’s changed?

We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.

Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.

Related: The Role Of Foreign Exchange In The Economy

Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.

There is significant financial savvy in all social strata.

In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.

The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.

How do you take strategic advantage of this democratisation?

  1. Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
  2. Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
  3. Remember, the ultimate loyalty reward is equity.

Your financial democracy business plan

Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.

That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.

What does such an exchange look like?

It has fintech capabilities. So:

It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.

It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.

It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.

It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.

It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.

It operates a principles-based regime. So:

It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.

It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.

It obviates the need for expensive specialist listings advisors.

It focuses on financial inclusion and access. So:

Shares can be bought and sold for no more than R1 000. See economy building point above.

Related: 27 Of The Richest People In South Africa

The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling

Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.

Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.

As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?

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