Photo by Zachary Staines on Unsplash
I’m a tax expert and a financial advisor with an MBA, and yet … I’ve STILL had to face a couple of big financial challenges. Once I cashed out my small retirement to pay off bills so I could quit my job and become self employed. The next time, I had to put properties that were draining my bank account up for deed in lieu of foreclosure … which killed my ego. So drawing from those personal experiences helps me come up with these 5 Financial Tips:
1) Take emotions out of important business decisions. The country provides legal provisions to allow us to not wallow in our poor decisions for the rest of our lives. They are not comfortable alternatives but foreclosure and bankruptcy should be considered and managed when appropriate as a good business decision.
2) Keep records and receipts for everything. Small business owners wear many hats and it is very easy to forget important moves, appointments and expenses. It is extremely important to keep records and receipts to remind you about what occurred during the year when it comes time to do taxes or create financials for lending purposes. Good records and receipts serve as good reminders when filling out applications for the bank or creating pitch decks for potential investors.
3) Have regular meetings with key staff, a spouse and key vendors. Once again, small business owners are wearing a lot of hats and it is easy to lose track of your direction, your influence and your growth without getting outside feedback. This helps you keep from going too far down a path that may not be what you intended or what is in your best interest. It also helps keep your eyes open to opportunities you may have missed because you were too busy to notice or to subvert a problem that may be affecting your team.
4) Write it down! Even if it’s just the ballpark numbers, jot down your projected income and expenses month to month. I like to do this one week before the next month starts because it
a) reminds you of bills that are easy to forget
b) gives you a chance to review results from the month that is ending
c) gives you time to make any adjustments to your needs based on whether you hit your ballpark projections or not
d) remind you of your needs before you extend your financial decisions to embrace your wants.
5) Review your numbers, especially before taking on new debt. I regularly remind my clients to know how much debt they’re carrying. Prioritize your debt based on the usefulness of the leveraging – can you make more money than you are being charged? Will the debt improve your short term performance or your long term performance? How much risk is involved in the terms of the debt. As always, write these answers down and review them at least quarterly (ideally monthly) to determine what you can afford to do and how will the debt affect your future plans.
What about you? Did you have any other questions as a Small Business Owner that I can help you address? If so, please leave a comment below or contact us here.
Let’s chat soon!