Embarking on the entrepreneurial journey is akin to setting out on an uncharted adventure. It's filled with unknowns, challenges, and the occasional surprise twist. While physical fitness often gets the spotlight with its glossy gym selfies and trendy workout regimes, there's a quieter, more calculated player in the game of success: financial fitness. We aren’t talking about putting your money on a treadmill, of course (that would be weird). Financial fitness is about smartly navigating the financial hurdles of running a business.
Setting Financial Intentions With Clarity
The first financial decision most entrepreneurs make is how to fund their business, and quite often they do it all wrong by using personal savings or credit cards improperly. If you use personal savings and don’t document the funding of your business properly, you could lose valuable tax benefits. And, if you use your personal credit cards to fund your business, you could hurt your credit score before accessing the vast amount of credit resources available to you through your business.
Before deciding how you’ll fund your business, educate yourself on what types of resources are available, how they can best be utilized, and how they can help you build a solid financial foundation from the start. Consult with advisors and mentors. Read books, listen to podcasts, purchase an online course. Whatever you need to do to increase your knowledge is a worthwhile investment in your future. If you’d like our help here, give us a call - we’ve got access to funding options you may not be aware of, and we can help you set up your business to maximize your tax savings as well.
So many entrepreneurs lack financial clarity when starting out. They’re excited about their ideas and ready to turn them into reality. But not moving forward with clarity is a mistake. Those without clarity also have no plan at all, and end up bootstrapping their business, or using their own money. They may use personal savings, the support of friends and family, or initial sales to build their business. If that’s right for you, great. Just make sure you’re doing so with your eyes wide open, understanding the limitations and opportunities.
If, on the other hand, you’ve educated yourself and decide to raise capital (or, use other people’s money). be sure to work with an expert who can guide you through what could be a complicated process. You don’t want to do this yourself. Also know exactly what you intend to build and by when.
Whatever decisions you make, do so deliberately. You need clarity from the outset. Be aware of your starting point, have a vision for what you're building, and make intentional choices to turn that vision into reality.
Establishing a Financial Routine: The Steady Path to Success
Routine might sound mundane, especially to visionary business owners, but in the realm of financial fitness, it’s the foundation upon which long-term success is built. A structured approach to managing finances ensures that every dollar is accounted for, opportunities for savings are maximized, and potential financial pitfalls are identified early.
What should your financial routine look like? Here’s an example:
- Use a Financial Tracking System: Implement a system to track income and expenditures. This gives you a bird's-eye view of your financial health, allowing you to make informed decisions and adjust strategies as needed, even in a pinch. Add a reminder to your calendar to stay consistent and avoid other priorities from crowding out your routine. If you need help setting up a financial tracking system, contact us for our recommendations.
- Get Access to Credit Before You Need It - the Right Way: Credit or Debt aren’t bad words when you are a business owner, they are a much needed resource you need to learn to leverage in the right way. If you need support with accessing and using debt wisely, get in touch. We can help.
- Build an Emergency Fund: An emergency fund is your financial safety net, designed to protect your business in times of unexpected challenges. It’s a buffer that allows you to operate with confidence, knowing you have the resources to weather storms. Set a goal for how much you need and take deliberate steps to ensure that money is set aside. Ideally, your emergency fund, which could include cash in the bank or access to business credit will equate to at least a few months of your monthly payroll and other expenses, so that if there is a shift in the market, you have time to respond.
Physical Fitness Also Counts!
It may not seem to relate, but keeping up your physical fitness greatly contributes to the financial fitness of your business. The interplay between physical and financial health is more profound than it appears, and if you ask the most successful entrepreneurs, many will tell you that they have a self-care routine that includes physical activity. It makes sense. A healthy body fosters a sharp mind, enhancing creativity, decision-making, and resilience—all critical traits for navigating the ups and downs of entrepreneurship. Making time for physical activity is not just about personal health; it's about embodying the strength and endurance your business needs from you. Invest in your physical health and well-being as you do any of your technology equipment. You are the machine running your business, and you require investment and regular maintenance to stay operational. Without you, nothing works, at least until you get a business succession plan in place. When you are ready for that, we can help!
A Balanced Approach With Expert Guidance
Achieving financial fitness as an entrepreneur requires more than just hard work and persistence. It demands a balanced approach, integrating careful planning, continuous learning, flexibility, and routine. It's about viewing each challenge not as a barrier but as an opportunity to grow and refine your business model. With a clear vision and a steadfast commitment to both your financial health, the path to success becomes not just attainable, but enjoyable.
As your LIFTed Business Advisor, I’m here to serve as your trusted guide, helping you increase your financial fitness with a clear and balanced plan that serves the company's best interests. Together, we’ll create that road map for you, so you’re able to go about the work of growing your business with confidence.
Schedule a complimentary call with us today to start planning your company’s future.
This article is a service of a Personal Family Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices with your business throughout life and in the event of your death. We also offer a LIFT Business Breakthrough Session™, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
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