Achieving success is every entrepreneur’s dream regardless of the niche they choose to fill. But it is not very easy to break even and see your idea turn into reasonable profits. The path to victory has many red flags to watch out for and express routes to take if you notice them in time.
And with the vast range of professional advice on personal finances out there, novices may find it tricky to figure out what’s best for their businesses. Here are a few wealth management guidelines to help you keep in check your professional and personal finances.
1-Keep Liquid Reserves and Prepare Accordingly
Businesses that survive long have the special intuition to “weather storms.”As you entity expands, try to store 6 to 12 months of your company expenses in accounts that can let you liquidate anytime you need your cash. Plus, it helps to secure the protections plans you need—like health insurance—early.
2-Diversify Excess Capital
Do not hold any excess money in your company. Diversifying your investment portfolio is important for your success. Holding back you excesses means those funds carry the same risks as that of your business. It is wise to pull out this capital and invest it in a niche with a different risk profile.
3-Work with Experts
Small companies often sink and close up because their owners make critical decisions without conferring with experts. Create a small network of useful contacts including that of an accountant, a lawyer, and a tax advisor.
4-Handle Personal Funds like Your Business Finances
Care for your personal funds the same way you do for your business. That way you can see where to cut expenses and increase savings as well as investments in your retirement accounts for the good of your future. Careless handling of personal finances could affect your business.
5-Make the Most of All Tax Breaks
Most small companies are now entitled to a 20% “pass-through” deduction thanks to the recent amendments in the U.S. tax code. Check with your tax expert to make sure your business (and you) are paying as little in tax as the law dictates. Also, be sure to consider retirement plans with tax advantages like self-employed 401(k)s and IRAs.
6-Pay yourself—don’t reinvest all your income
Most times, newbie entrepreneurs want to put back all their revenue into the business. Do not invest everything you have into your business. Preferably, save 10–20 percent of your total income to cover your long-term objectives.
Now that businesses can accept checks by phone and take payments through many other methods, entrepreneurs should come up with new strategies to compete favorably.
Author bio: Electronic payments expert Blair Thomas is the co-founder of high-risk payment processing company eMerchantBroker. His job includes helping merchants accept checks by phone. Thomas is just as passionate about his business as he is with traveling and spending time with his dog Cooper.