Action Plan for Personal and Professional Financial Security for Small Business Owners
One of the biggest areas of concern for a small business owner is personal and professional financial security. Since many small businesses are almost entirely self-managed, the two areas can sometimes overlap or combine to become overwhelming. The pressures and responsibilities that come with business and family life can often cause you to put budget concerns on the back burner. However, if you want to put a plan in place that will help you achieve financial success and security, there are some important questions to ask yourself.
First, determine what you want to achieve. Be sure to set realistic and reasonable earnings and savings goals for the coming year. Calculate your long-, medium-, and short-term goals, and remember to consider an emergency cash account. Many business owners only plan their known assets for a projected fiscal year; having one to three months of salary in an emergency fund will help you be prepared in case of unforeseen expenses.
Non-essential purchases can slowly eat away at your cash and credit reserve. For a month, it meticulously tracks each and every purchase you make. At the end of the month, make a clear line between the purchases you need and the purchases you can do without. Do your best to remove the latter. You’ll be amazed at how much your business expense account saves each month!
Second, ask yourself what exactly you need to prepare for. Use your calendar year budget to help you prepare for the very long term. The first thing to do is make sure you participate in some type of long-term retirement program, like a 401(k). If your company does not or cannot currently offer a 401(k), be sure to “max out” your monthly contribution to another IRA or other tax-qualified retirement instrument.
With the financial demands of the here and now, it can be tempting to put off and put off creating a long-term savings plan. But time matters. It can be one of your greatest allies as you develop strategies to reach your financial goals. Successful savers are in charge of their own destinies, direct their own daily lives, fulfill their dreams, and enjoy a sense of accomplishment when it comes to their finances. In short, successful savers run successful businesses.
If you can make responsible decisions, your small business’s financial future should be secure. Remember, the hardest part of financial planning is getting started. Once you get rolling, you can let it take you to a place where you can take greater risks with your business and experience the greater rewards that come with them.
