If you keep up with my blog, you probably know I’m big on health, wellness & fitness. I believe physical fitness and wellbeing is an important part of running a business. When you achieve a balance between your family, health, personal life and business, you will be much more successful.
But, there’s another form of fitness that’s essential to your success: financial fitness in your business.
What do I mean by this? I’m referring to the financial stability of your business, which will allow you to operate things smoothly, give you room to grow your business and of course, offer you the ultimate freedom lifestyle we all want.
Sometimes when I start talking to business leaders about finances, the mood changes. Talking about money can make people uncomfortable and stressed. But, achieving financial fitness is incredibly important, and it’s something that you can attain with just a few simple guidelines.
Always have a Plan
Without a plan, you are headed straight for trouble. Having a financial plan in place will ensure your business accounts run smoothly, so you are easily able to cover your expenses.
This plan should be so detailed that it accounts for every dollar that comes into your business and every dollar that leaves your business. Outline things like expected revenue, financial goals, expenses and savings, and then stick to your plan.
Continually add to a Business Savings Account
When you first start your business, it’s tempting to keep all the profits as part of your own income. This is not a wise move and will lead to problems down the road, like inability to cover costs and fewer opportunities to expand.
From the very beginning, have a business savings account and continually add to it. Decide in advance how much of your profit will go into the account and use it to cover things like overhead costs, emergencies and other business expenses that will help you grow.
Maintain an Investment Mindset
To grow your business, you will need to learn how to invest your profit wisely, to expand your business and increase your income. As you plan your finances and decide what to do with your profit, do so with an investment mindset.
In other words, carefully spend money on things that will help your business grow, that will provide passive income and that will bring more value to your business.
This could mean hiring more staff members so you can take on more work or it could mean investing in stocks or real estate properties. However you do it, always invest your profit in ways that will increase your value.
I’ve learned to invest my profit and have seen huge benefits to doing so. What I did was take chunks of my profits and put them into down payments for rental properties. I started with one property…then a 2nd..and a 3rd…and now I have several income properties. I went from zero to 3 million in RE assets in less than 5 years and also became mortgage free on my personal property.
I knew I wanted time freedom and it was happening by year 3 of my home business career. So now I teach people how to build leveraged, residual income with a side home based business.
Understand and Prepare for Taxes
Finally, taxes are a part of running your business. Understand what is required of your business, what expenses you can write off and how you should file your taxes. Then, plan and prepare for them all year, not just a few weeks before the deadline.
The best way to do this is to work with an accountant who specializes in taxes to make sure you are filing them correctly and preparing well.
Of course, working with an accredited accountant and tax expert is vital when it comes to maintaining your finances on all levels, and I advise every business leader to do this. However, these financial guidelines can help you achieve financial fitness at your business, making it more stable and opening up more opportunities.
If you’re interested in learning more about how you can build and maintain your business, contact me.