Owning your own small business can make you feel strong, independent, and in control of your own destiny. It can also keep you up at night, stress you out, and make you wonder what on Earth you were thinking. This is usually triggered by financial worries.
While there are a number of things you can’t control (like, say, a global pandemic), there are many ways you can take back control of your and your business’s finances if you have a firm financial plan.
Here are some questions to ask yourself:
- Your business financial plan & tax planning strategies
- Do you maintain a prioritized list of personal/financial goals?
- Do you consult it before making any major decisions?
- Did you structure your business around legal protections to receive its benefits?
- Do you defer taxes while maximizing deductions and credits (including timing income and expenses/charitable gifting/saving for retirement)?
- Your budget
- Do you know your break-even number (so expenses are covered before profit)?
- Do you go through your expenses, make adjustments, and balance your inventory and cash flow so you can create savings and cover operating expenses?
- Do you manage cash flow and know when and where financing might be needed?
- Your investments
- Do you have a cash cushion?
- Do you save regularly and invest the difference outside the business after the operational expenses are covered?
- Do you diversify your investments in other lines of business not related to your industry?
- Your exit strategy
- Do you have one? Is it realistic?
- Does it cover your efforts/sweat equity through retirement?
- Are you the key employee or do you have a true #2? What would it cost to replace you/them?
- Your savings
- Are you saving for a child’s college education?
- Are you putting aside enough to retire when you want to?
- Do you have an emergency fund, and is there enough in it?
- Your Risks
- Do you understand the unique risks of operating your business?
- Do you have the right insurance to cover those risks (liability, property, business interruption, life and disability, worker’s comp, health insurance, etc.)?
While it’s enough to make your head spin, you’re in luck – you don’t have to navigate this alone. While you need to wear a lot of hats, there is such a thing as one hat too many. Stop trying to do everything yourself. One of the first things successful small business owners do is to surround themselves with people with the expertise to help them when they need it.
I’ve been helping small business owners take control of their financial destinies for years. Reach out and tell me what’s been keeping you up at night. We can review where you are today, and where you want to be in the future. I can help make sure your risks are mitigated, your operating costs are where they should be, and that you are taking care of yourself and your family as much as you are your business.