Not only is your business your 9-5, day-to-day job, it’s also your financial lifeline that supports you now and builds for your future. That’s why it’s important to take the necessary steps to ensure you and your business remain healthy and allow you to benefit long term.
Here are four wealth management tips that can help any business owner.
- Surround yourself with experts – Rome wasn’t built in a day, and you can’t do everything on your own. Build a network of experts across multiple disciplines that you trust. If you’re unsure where to start, then a good set of experts to find include a lawyer, an accountant, and a financial advisor. It may also be wise to find a friend within your own industry who has several years of experience under their belt that you can learn from.
- Pay yourself first – Often business owners want to reinvest their funds back into their business. While this seems like a good plan, in the long run it has potential to hurt you personally. Reinvesting all of your earnings back into your business can big risky because if something happens you lose everything, including your retirement plan. Instead, invest a set amount of your income each month into a retirement plan to ensure you have savings leftover when the time is needed.
- Implement a succession plan – Begin planning now for how you want your business to be handled once your time to leave comes. Some business owners wait until it’s too late and by the time they want to retire they can’t because they’re still tied down to a business. Prevent that from becoming your fate by talking with potential buyers or developing a plan for someone to step in to take over. Creating a succession plan now will make the transition much easier in the future, allowing you and your business to part ways the way you intend too.
- Keep personal and business finances separate – This might feel like a no brainer, but it can be hard to follow when your entire life is your business. Make it your goal to keep entirely separate finance accounts for your personal life and your professional life. This will make everything easier to follow for everyone involved, including your accountant, lawyer, and financial advisor. Doing so will also give you an accurate picture of how you and your business are both performing individually.