5 Financial Tips To Help Entrepreneurs Be Successful
According to the Small Business Administration, roughly 600,000 new businesses open each year. Approximately that same number closes each year. The 5-year survival rate for a new business with employees is about 50 percent. A variety of elements goes into determining which businesses will be on the opening and closing side of things, and financial issues have a lot to do with it. The better the financial side of things is handled by an entrepreneur, the higher their chances for long-term business success will be.
“Every entrepreneur has high hopes and usually a great idea,” explains Brad Glickman, a certified financial planner professional and president of Bernard R. Wolfe & Associates, Inc., a company that specializes in offering wealth management strategies. “But unless you can manage the financial side of things, it may never come to fruition. It’s crucial that entrepreneurs take financial advice seriously and heed some of it, so that they can help increase their longevity.”
Here are 5 financial tips that will help entrepreneurs be more successful in their business ventures:
- Build an emergency fund. Before you even start your business, you should make sure that you have a nest egg to fall back on since most new business owners struggle the first few years. It’s also important to make sure that not all of your assets are tied up in this new business since you’re risking enough already.
- Manage the cash flow. One of the biggest problems that can kill a business is lack of cash flow. The money has to keep flowing in, or business will come to a halt. It’s important to have a plan so that you don’t run out of cash and have to post the “closed” sign. Make sure that if you have a business that’s seasonal, that you save for the times when business is slow.
- Skip the office. Many entrepreneurs get excited to sign a new lease for office space. But this requires a long term financial commitment that is risky to make in the beginning. If possible, work out of a home office as long as possible. A portion of the business related expenses may be deductible on your tax return. If a small office cannot be avoided, look into shared space office buildings which will save money and give the appearance of a larger office.
- Take advantage of retirement plans. Assuming you are profitable, there are many retirement plans for self-employed individuals besides the Traditional IRA or 401k for those who worked for a larger company previously. You may be able to put away significantly more tax deductible contributions into a SEP IRA, Single 401(k) plan, or a defined benefit plan depending on your corporate structure and profits.
- Work with a tax advisor. It may be beneficial to work closely with a Certified Public Accountant who specializes in working with small business owners. They can offer advice to help you decrease taxes and to keep you in compliance with the IRS. It’s very important that your accountant and your financial planner communicate regularly as part of your wealth management team.
“There are over 27 million businesses across America at any given time,” adds Glickman. “So there are a lot of successful entrepreneurs. The more people take a proactive approach and follow this advice, the higher their chances for business success are likely to be.”
Bernard R. Wolfe & Associates, Inc., has provided financial management strategies and investment services since 1981. They assist a wide range of private and corporate clients with everything from estate planning and investment advice to divorce planning. The company also offers professional women’s financial planning services, led by Samantha Fraelich, a CERTIFIED FINANCIAL PLANNER™ Professional.
About Bernard R. Wolfe & Associates, Inc.
Bernard R. Wolfe & Associates, Inc., founded in 1981, provides wealth management strategies and institutional investment services. The company is led by a team of CERTIFIED FINANCIAL PLANNER™ Professionals who have over 50 years of combined years of experience in the field. The team of professionals provides knowledgeable financial planning guidance to a diverse range of personal and corporate clients. To learn more about Bernard R. Wolfe & Associates, Inc., visit the website at www.bernardwolfe.com.
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Jess Loren is an energetic entrepreneur and start-up savant who specializes in the team-based execution of innovative ideas. The co-founder of Chicago social media marketing and business technology solutions company Kambio Group & tech/pop culture blog SocialTechPop, Jess is not only a fluent expert in the present state of social media, but a visionary with an eye toward the future. In her projects, Jess combines the effects of cutting-edge technology with the connectivity of social media, and examines how they play a role in determining the next big thing. Jess has contributed across the industry, working with everyone from Fortune 500 companies to a company that hosts the “largest bar crawl in America.” Follow Jess on Twitter @chitownjess