by Shawn Glogowski, CFP Principal & Chief Compliance Officer
First of two installments
You’re about to start a company, and you can’t yet afford to hire a full-time accountant. At the same time, proper financial planning is vital for success. And if you make too many mistakes with your money, then your business won’t last very long. The good news is that there are some common-sense steps you can take to protect your bottom line today and into the future.
#1: Know where you stand.
When you’re employed by a company, it’s easy to take paid vacations and health care plans for granted. Those are gone once you’re out on your own. That’s why, before you make a move and start a company, you should know where you stand financially and what you need to earn each month to live. Also, find out how much health care will cost you and figure out what you’re going to do with your 401k plan.
#2: Identify a financial mentor.
You don’t need to own a multimillion dollar company to get a financial mentor. In fact, we at GCW Capital Group and other financial planners work with companies in all stages of development. If that’s not an option, tap a family member, friend or colleague who works in finance or accounting for advice and insight. They can offer you valuable information and perspectives you might not have considered.
#3: Figure out how you’ll fund your business.
For some start-ups, outside funding makes sense. For others, it’s not needed. Before you make your next move, learn about and understand all your funding options. Also, evaluate which ones make the most sense for your business. From crowdfunding and venture capitalists to tapping family members, there are plenty of options out there to consider.
#4: Set financial goals early.
You want to build a successful, profit-generating business. Don’t we all? When it comes to goal-setting, though, you need to be more specific. Start setting weekly and monthly goals, and tracking and adjusting them as needed. It’s good to think about the big picture. But having smaller goals – that are more attainable – can also help you stay motivated in the long run.
#5: Create a cash cushion.
If you have a great product or service and a strong response from your customer base, it’s tempting to invest every cent of profits back into your business. But while your company books might look great on paper, doing so could mean you’re cash poor in reality. You can and should reinvest in your business, just not everything. Instead, build up a short-term cash cushion you can tap when needed.
GCW Capital Group helps clients navigate the complex landscape of financial planning with unbiased advice and guidance. Our mission is to be a source of financial clarity, confidence, leadership and support. Learn more about the services we provide. Or schedule an initial consultation by calling 716-256-1682, using our online form or by emailing firstname.lastname@example.org.