APPRENTICE TIPS : Financial tips for an entrepreneur

Entrepreneurs do face a set of inimitable challenges when planning their financial future.

Small business owners are in an exceptional financial position, especially when they start planning for the future. Many won’t have the same range of financial assets that employees develop over their career, and plenty will be relying on the business to provide for them and their families when they step back from the organisation and retire.

While this position presents a level of freedom and multiple opportunities, it comes with its own challenges and financial risks so to say. My consultative message to this matter is that it is imperative to utilize right advice from competent business and financial consultants hence can take away the uncertainty and make this process easier and safer to entrepreneur.

Financial Consultants can definitely help you as business owner to critically assess your, both, business and personal goals and outline a financial plan pattern that will ensure success and security in the long-term.

Tailoring your finances to your business structure is really important to ensure good track of your financials. The solitary largest issue for business owners is the nature of the company they are operating. Take an example of a sole trader, there is almost no distinction between personal and company finances. At times you can even find him possessing personal account that runs both business and personal accounting. In this matter it is hard for him to split the bank transactions and this increases business risks.

Even more challenging can be situations where businesses are run as a partnership or there are multiple stakeholders who have different interests in the organization. Formulating a plan where you can leave the company and withdraw your personal share is a delicate process and requires you to have a frank conversation about the future.

This is especially true if you are running a family business. Separating your own financial needs and those of your family from those of the firm is not easy and will require plenty of discussion about where the company is heading.

Furthermore, your own plans around areas such as succession will affect your own financial future. If your plan is to hand over the day-to-day management of a company to another person while retaining your share of the business, your personal finances will still be tightly tied to those of the company.

For many company owners, separating personal and business finances is one of their biggest challenges. Part of this simply comes down to the question of where your company finances end and personal finances begin, especially if you have grown the enterprise from the very earliest stages to where it is now.

Many owners will also have secured their organization’s growth against their personal assets, with real estate often used as collateral for small-business financing.

…follow through my next consultative message in the next The Citizen release.

By Julius Landu Bulili – M.Sc. (Economics &Econometrics); CPM, S.A.| Small & Medium Enterprises Coach| Business plans & Project Proposals writer|, assisting Small Businesses refocus their efforts in order to increase revenue. Email: [email protected] or jullybulili@gmail