Making Life Purchases When Running a Business: What To Remember

The tasks associated with running a business are overwhelming, to say the least. One of the biggest problems so many entrepreneurs and business owners are having now is making big purchases in their life. Purchasing a home is something that many people are struggling with right now. But what are the things we have to remember when we are looking to make these big life purchases while also running a company?

Understand the Valuable Resources

A lot of people had no choice but to go self-employed during the stock market crash in 2008/2009 or those that lost their jobs from the pandemic. If you are concerned that you are not able to make these big purchases in life, such as a house, the valuable resources are there, it’s just about understanding where to find them.

If you want to buy a house, the right collection of mortgage brokers will be able to help you find a lender that can align with your self-employed role. It can seem like a major headache, especially when lenders are asking for more than one year’s worth of accounts when you are a brand new entrepreneur, but the right advice can be invaluable.

Keep Your Business and Personal Accounts Separate

This is one of the most important lessons entrepreneurs can benefit from. If you are looking to make a purchase, whether it’s a car or a property, you should not feel the temptation to try and top up one account with the other. This is something that many small businesses feel is the only way to keep afloat during tough times. The problem in doing this is that when you start to get into the habit of just topping up a bit here and there, the balance is not going to be in your favour.

If you top up your personal bank account with your business earnings when starting a home-based business, you’ve got to think that when you are struggling to get by, you’ve got to put more effort into making the business more profitable rather than just topping yourself up with your personal finances.

Getting the Earning Potential Just Right

If you are trying to make big purchases in life, your business hasn’t got to the point where it is self-sufficient, yet you’ve got to think about how you can get the balance right. If you are trying to make a big purchase like a house but you are not going to do it for another few years, you might benefit from getting a new job where you have the potential to earn a living but it also makes the application process mortgage easier. Applying for a mortgage in the UK when you are fully employed means showing three months of bank statements. Conversely, self-employed people will need to show between 1 and 3 years worth of accounts.

It is certainly possible to make these big life purchases when you are running a business but the solution to it is all about timing. You don’t want to dive into a business right away when you are ready to make a purchase in life and the opposite applies too.


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