| One of the hardest aspects of being an | | | | of the performance of the business and there are |
| entrepreneur is staying on top of some things | | | | a number of reasons for this. This especially |
| you may not like to do because you either don't | | | | applies if the owner of the business has another |
| enjoy them or simply aren't good at them...or | | | | member of the family or an employee look after |
| both. Doing math back in school just wasn't fun | | | | the books. Whether we like it or not, this |
| for me. I enjoyed almost every other subject | | | | recession has seen an up-tick in theft from |
| except anything to do with numbers as there | | | | businesses from those entrusted with handling the |
| seemed too many rules and exceptions to | | | | books. If frequent and relatively detailed reviews |
| remember. | | | | are not put in place, money can disappear from |
| Most entrepreneurs do not enjoy numbers. They | | | | the business. A simple strategy of getting a copy |
| are happy to relegate the task of debits and | | | | of the monthly Profit and Loss Statement, check |
| credits or journal entries or double entry | | | | stubs and bank statements can allow a series of |
| book-keeping to someone who enjoys it. Define | | | | questions and answers to quickly reveal whether |
| your core competencies and what you do well | | | | or not things are in order. Expenses are always |
| and then delegate to other people who have the | | | | allocated to a category on the Profit and Loss |
| right skill set and aptitude to do the things they | | | | Statement. Doing a test each month on some of |
| do well. In simple business terms it's called | | | | the larger categories to make sure there is |
| outsourcing. | | | | nothing unknown or unexpected can reveal if any |
| The problem with outsourcing your personal and | | | | further more detailed checking is required. These |
| business finances is that you can lose track of | | | | tests need to be random and sometimes with |
| what all entrepreneurs call the bottom line or their | | | | little notice. |
| net worth. For different reasons the bottom line | | | | Finally, if you are looking to buy your business, it |
| tends to move around a bit. I'm not talking about | | | | will be important to have your financial plan in |
| the monthly bank statement bottom line, I'm | | | | order. For buying a business this includes knowing |
| talking about "taking money off the table" of your | | | | what cash you have available to use as a down |
| business and investing it and moving this into your | | | | payment to buy a business. If you plan to borrow |
| personal finances such as your 401K, investing in | | | | money from your inheritance, a parent, |
| property or some other form of long term | | | | grandparent, aunt or uncle get a letter in writing |
| investment. | | | | so you can show it to a seller and the bank |
| One of the first items to review as part of your | | | | lending you money. You can also borrow money |
| financial plan is the legal entity you are using to | | | | against your 401k plan. This takes time to put |
| operate your business. If you operate as a sole | | | | together, so make sure you allow the lead time |
| proprietor all your personal assets are exposed | | | | of about 30 days to make this happen. Other |
| should you do something wrong. Changing your | | | | parts of your financial plan to get in order are |
| legal entity to a Corporation or LLC may offer | | | | your credit score and credit report. Most third |
| legal protection but get the right advice from an | | | | party lenders are looking for a credit score of at |
| attorney. | | | | least 700 at the moment. It's also critical to check |
| In addition to the legal entity, getting an annual | | | | your credit report to make sure there are no |
| review of your insurance products is a wise and | | | | errors on it. Do this as soon as you can as errors |
| fairly cheap investment. Your insurance agent | | | | take time to correct. Although not related to your |
| should be willing to reassess your personal and | | | | financial plan, it's also important to have an up to |
| business needs to make sure you have enough | | | | date resume as this will be looked at by lenders |
| life, death, vehicle, health, business interruption and | | | | and possibly the seller if the seller is being asked |
| other insurance policies. | | | | to carry a note on the selling price. |
| Another aspect of your Financial Plan is the | | | | One of the main reasons for being an |
| performance of your business and if you are | | | | entrepreneur is so you can enjoy the fruits of |
| transferring profit from the business to fund and | | | | your labor. Being an entrepreneur allows you to |
| maintain your retirement. This advice is best | | | | follow your own dream instead of working for |
| sourced from your personal financial planner as | | | | someone else and building their dream. Having a |
| they track trends and performance and can | | | | quality and creditable financial plan should be part |
| advise whether it's best to put money into the | | | | of your success strategy. And remember, just as |
| stock market or other classes of asset allocation. | | | | our personal fitness changes as we journey |
| They too have access to a full range of financial | | | | through life, so will our financial situation. We |
| products that not only cover investing for your | | | | recognize that going to a doctor or dentist is |
| retirement but insurance products, short and long | | | | good for our personal health, equally good is |
| term investment strategies. | | | | talking with different financial professionals including |
| The above are all personal or external reviews of | | | | estate attorneys to make sure our financial plan is |
| your finance. An equally important aspect though | | | | well rounded is just as important. |
| is the business. A lot of business owners do an | | | | A solid and well researched Business Plan is one of |
| annual check-up just prior to handing over all their | | | | the three key tools of an entrepreneur's success. |
| documents to their accountant to prepare and | | | | Part 4 of this article series covers why a Business |
| report their tax returns. What, however, is a | | | | Plan is so important and offers a link to download |
| good strategy is doing at least a monthly review | | | | a business plan template for free. |