Financial wellness means having certainty that can control of your financial responsibilities, can navigate through any unexpected expense, and can meet long-term financial goals. While entrepreneurs should rightfully be spending their time building their businesses, part of their schedule should include financial planning. We have five tips for financial wellness.
Have a budget.
Budgets help you choose priorities and is the basis of your business financial plan. Budgets should have both short-term and long-term plans. Set a monthly budget and create it for the entire year. Then, look at quarter to quarter for up to three years. If you haven’t already, make sure that your personal and business finances are separate and set aside cash for taxes.
Know if you are making or losing money.
This sounds simple but if entrepreneurs don’t see their cash flow in numbers, how do they know if they are making money or losing money. Go beyond budgeting your income statement and use tools like an Income Statement and Balance Sheet on a monthly basis to keep track of your money. This is important especially when you are looking to add additional properties or large inventories to your business. You must first understand the effects on your finances of these decisions.
Watch this video on how to complete an Income Statement and Balance Sheet: https://liftfundstage.wpengine.com/liftfund-resources/liftfund-income-statement-balance-sheet/
Find partners to help your business grow.
Entrepreneurs are usually great at running their business but not always the best at managing the finances. Ask for help so you can focus on your strengths. Your financial support team could consist of a certified public accountant (CPA), an attorney, a financial planner and even a business mentor. Get clear on what your needs are to help you choose who needs to be on your team.
Make finances a priority.
Financial wellness is like physical fitness. You know what to do but if you don’t do anything with it, it doesn’t matter. Set financial benchmarks for your business. Whether you miss them or make them, you can adjust accordingly. Leaning on your financial team and online resources, educate yourself and then take action to build your financial skills and your confidence.
Plan for your retirement.
Part of keeping your business profitable is planning for your own retirement. Your business can and should reasonably support your retirement savings. In your financial plan, make sure you have a place for retirement funds. If you have employees, look for programs that will help them plan for their retirement as well. Create an environment of saving money.