Entrepreneurs know that there are ebbs and flows when it comes to business income and expenses. A way to play for those ebbs in cash flow is to have a plan in place for them — prior to the cash influx slow down. Here are my tips for financial planning for entrepreneurs:
- Define goals. If you know your financial goals, you can set a course to meet them.
- Know your current financial situation. If you’re unaware of your financial situation or your income and expenses you may either find yourself panicking when you don’t need to or you might overspend when you don’t have cash in the bank to cover your spending.
- Build, and protect, wealth. When you’re in a financial upswing, set aside money to plan for that rainy day. Have a savings account for your business. Put money into your retirement account. Talk with a financial planner to assure your retirement goals will be met.
- Speaking of retirement… plan for it. You will want to retire at some point and you need to decide what that point is and plan for it. What will you need to have in your bank account in order to survive and enjoy your Golden Years? Determine that and work with a financial planner to help you make that happen.
- What’s your legacy? Do you want to leave money to your children or grandchildren? Do you plan to sell your business when you retire? What assets will you need to divest yourself of, and how?
Being a business owner is an ideal way to live life, just make your plans — early on in your business phase — for your eventual retirement. You’ve earned it!