You will often hear me say that as a business owner you are in a unique position to build your wealth. I firmly believe that the fastest way to become rich is through smart business management. That is why wealth management for entrepreneurs is a skill that all business owners should have. Especially if you’re serious about becoming rich.
The secret that wealthy people know is that it’s not about how much money you make, it’s how you manage your money.
Money management in business is crucial to profit optimization. Profit is the money you keep in your business that you can reinvest to grow your business. A business financial plan shows you how to grow your business and reinvest profit for growth.
Wealth management and money mindset for entrepreneurs
Never underestimate the importance of money mindset when it comes to managing your wealth. Your mindset dictates your behaviour and building and attaining wealth is 80% behaviour. When you have a negative relationship with money, you will have a negative bank account.
I love to show entrepreneurs how to create wealth through good money management in your business.
Read: Money Mindset Books To Help You With Your Business
Money is emotional, and it is personal. If you find you have a negative relationship with money, I highly recommend you do some work on that relationship. You don’t want money mindset issues holding you back from creating wealth in your business and increasing your net worth. Doing the mindset work is an excellent investment to make in yourself so that you can get that ROI in your business and increase your net worth.
How to build your net worth through your business
As a business owner who owns a private company, chances are you own your business 100%. So it makes sense that you would want to make your business as profitable as you can. Profit is what creates the wealth (value) in your business.
Read: How to Build Your Wealth as a Small Business Owner
What is a business financial plan?
A business financial plan assesses where your business is at now and plans out the next 12 months to where you want your business to go. Business financial planning is vital as it provides goals for your business for the year and outlines how your business will achieve those goals.
A business financial plan is a vital step in the wealth management process for entrepreneurs and business owners.
Why financial planning is important
Wealth management for entrepreneurs is important because you need a strategy to build your wealth and financial planning provides that strategy.
“A goal without a plan is just a wish.” – Melissa says this often
You need to create big goals for your business and get a plan together to guide you to achieving your financial goals. Your financial goals in your business need to include profit optimization and growth strategies.
A business plan helps you map out your goals into reasonable steps to take to achieve those goals. An essential part of financial planning in business is to monitor your results against the financial plan. The financial plan is broken down month by month and through monitoring your results against the plan each month you can reflect on what went well and what needs to be corrected to realize your goals.
The role of finance professionals who help you build the wealth in your business
The financial landscape is confusing to many entrepreneurs and business owners as they aren’t sure which finance professional to turn to when they need them. There are accountants, bookkeepers, financial advisors, business finance coaches, and the list goes on.
Who does what in business?
Here is a list of finance professionals that can help you in your business:
1. Bookkeeper
A bookkeeper is responsible for the data entry of receipts, invoices, expenses, and any financial transaction into your accounting software to manage the financial records of your business.
2. Chief Financial Officer
A CFO is the most senior finance person in an organization and is an advisor to the CEO. CFOs are concerned with profit optimization and strategic growth of the business. CFOs appear in large corporations but often small to medium size businesses use fractional CFOs.
3. Tax accountant
All businesses must file tax returns and need a tax accountant. A tax accountant specializes in income tax and tax optimization strategies for business owners.
4. Financial advisor
When you have money to invest you consult a financial advisor to guide you through the types of investments that you should make through your business or personal financial portfolio.
5. Business finance coach
A business finance coach is great for small businesses who need the financial support of an accountant but don’t need the done for you services that fractional CFOs offer. A business finance coach teaches the business owner how to effectively manage money within their business so that they optimize profit and keep more money in their pocket.
Hiring the right financial professionals to advise you in your business will help you increase profits and build a solid financial foundation for your business.
The bottom line is that wealth management for entrepreneurs and business owners requires a strategy that has many moving parts. It’s crucial that as a business owner you have a high-level understanding of the financial health of your business. But let me be clear, hiring financial professionals for guidance and advice does not give you permission to check out of your business finances. You need to understand your business finances. Never give your financial power away.
If you want to set your business up for profit optimization and build wealth for your business, and you believe that you are ready to work with a business finance coach, I invite you to book a consult with me. In this 30-minute consult we will discuss where your business is at and where you’d like it to go, along with your financial goals. I look forward to strategizing with you!
