4 Pro Financial Planning Tips for Small Businesses
Brittney Castro, CFP® at Perennial Financial Services (http://perennialfinancialservices.com/), offer four quick tips for financial planning. Follow these steps to properly asses and prepare your businesses' financial future.
- Know & understand your current financial standing
- Determine overall financial goals
- Strategically save for the future
- Be sure to live within your means
It's really important for small business owners to understand their personal financial situation and then also develop a financial plan to help them reach all of their different financial goals that they have for themselves.
Some tips I'd like to offer my clients are, know your current financial situation. What I mean by this is just know your income, your expenses, know how many assets you have, know your liabilities, know all your different insurance coverages, just know everything going on today in your personal financial situation. You won't really just going to take inventory of it all.
Then you want to determine your different financial goals. So you want to break this up into short term goals, medium term goals and long term goals. That will help you kind of stay more motivated along the way, and also plan more strategically with your money for each one of those goals.
Then you want to save for those goals so it's important as a business owner that you continue to save for all your different financial goals outside the business. Some common examples would be, let's say, you want to travel. In a year, you know, you want to be able to save for that. You want to buy a home or a second home, you want to send your kids through college, you want to retire at a certain age. So there's lot of different financial goals that you want to plan for and then be able to save in a regular basis.
And the last one would be, just live within your means. This will help you save within your financial goals but as business owners, our lives are really complex. And you know, again, we just want to know what our personal financial situation is. We want to know our cash info and outflow and make sure we can save and live within our means in order to provide a better financial future for ourselves and our businesses.
Even though it can be time consuming, understanding your personal financial plan and goals can actually really help your business strategically. It will help carry your business forward, grow it to a level that it needs to grow to in order to support your personal financial situation.