Financial Planning for Small Business Owners

Financial Planning for Small Business Owners

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Becoming an entrepreneur is an exciting and rewarding step to take in life; however, like many great things, it can be pretty intimidating. But remember, you are the owner of the business and you design the path to success. It’s best to face the inevitable challenges with an arsenal of safety-nets, and the only way to build them is via in depth planning and preparation.

 

The word “entrepreneur” itself is so complicated. Synonyms include tycoon, mogul, hustler, etc. They are so illusory that it can become easy to get lost in the façade. However, it’s possible for anyone to start a business. Step 1: Break it down. Your top 3 focuses should be on investment, risk management, and retirement.

 

Risk Management:

Starting a business is a huge, but manageable, financial risk. Trouble may arise in the form of disability, defective products, disasters (that’s a lot of dangerous D’s!). The way to protect yourself is in the form of insurance. The insurance needs to cover you, your business, and your employees. This is essential as it’s very easy and unpredictable for something to fall through, and it will be OK so long as you have protection.

 

Investment Planning:

It is very probable that you are doing the financing yourself at first, which is great. It allows for you to control the capital. Additionally, investors are great. When it comes to investments, you must choose wisely. This is true for both the investor in you (once you have capital to re-invest in your business), and who you allow to invest in your company. Consider all of the risks, talk to a lawyer, and tread carefully.

 

Retirement Planning:

Ahhh… wouldn’t it be nice to relax with your toes in the sand, forever? Of course, this is unrealistic; however, if you plan ahead, you may be able to feel this way at a point in your life. Many entrepreneurs are so in the moment, that they forget about the possibility of retirement. The irony is that they are the people who should be especially invested in planning retirement. Look into tax-advantaged ways to save and remember that entrepreneurs are permissible to put aside more money than people who don’t own their own businesses.

 

 

This article was written by a content writer after interviewing an expert in the field*

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Gabrielle Hartman

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