In order to have a successful business, you need to create financial stability in your own life. If you’re stressed out about money, it will be difficult to give your business the attention, focus, and resources it needs in order to thrive.
Starting and growing a business, however, takes so much effort, that it can be easy to drop the ball on personal financial management.
â€œI wish I would have created a network of key financial professions for advice and feedback,â€ says Mike James, president and chief sales officer at Partners Financial, and a panelist at Black Enterpriseâ€™s Entrepreneurs Summit May 4 – 7 in Miami.
James adds that he wishes that he â€œwould have learned to pay myself earlier in the way of forced savings,â€ and spent more time learning about insurance and financial services products via my network earlier.
Lisa Price, founder of Carolâ€™s Daughter, natural hair and beauty products maker, and also a panelist at BEâ€™s Entrepreneurs Summit, also wishes she would have known more about taxes and financial service products like insurance. Price also wishes she was more comfortable speaking her mind early on.
â€œNot being nervous admitting that you donâ€™t understand a P&L, and other financial statements. It may not be something you want to admit in a group setting. However, not all entrepreneurs are CPA’s and vice versa.â€
Price also adds that early stage entrepreneurs need to negotiate.
â€œI wish I would have known better early on that in negotiations playing hardball is expected and normal practice. It isn’t being confrontational,â€ she says.
Other tips entrepreneurs need to remember:
- Always have an emergency fund: Chances are your income will be unsteady. You may have to tap into your â€˜rainy dayâ€™ fund to cover basic expenses like housing, utilities, and food. Many financial planners recommend that we all have at least enough in emergency savings to cover 3 monthâ€™s of expenses. Entrepreneurs may need to sock away a little more as downturns in the economy, and unexpected expenses may tap into their ability to make income from their businesses.
- Separate business and personal expenses: Keeping your personal expenses and business separate can help you stay organized for accounting and tax purposes, but keeping your personal finances separate can protect you from being liable for some of the financial elements.
- Save for retirement: One of my favorite motivators when it comes to taking retirement planning seriously is to literally look at an older version of myself with Merrill Edgeâ€™s face retirement app. It reminds you that there is someone out there that you will have to create financial security for in the older yearsâ€” you. This can be particularly helpful for entrepreneurs who have to be very disciplined about retirement savings while trying to nurture their companies. SEP IRAs, individual 401k plans, and even defined benefit plans are options entrepreneurs should consider.
Also, as we celebrate Small Business Week in the United States, give your business a helping hand and seek out professional advice to make sure you have the financial foundation needed to make your entrepreneurial dreams a reality.