013: Financial Planning For Entrepreneurs

Being a successful entrepreneur requires a lot of expertise in a lot of different areas. One of the most important aspects of becoming a successful business owner is having your finances in order; after all, with no money, you've got no business. I have had an entrepreneurial drive since I was young, and understand the importance of having a financial plan in place for your business. On this episode, Dustin R. Granger, CFP® and I share a few tips entrepreneurs can use to gain income clarity, track expenses and plan for expansion.

What is your money “why?”

Simon Sinek’s famous Ted talk has inspired some renewed attention to the “why factor” behind a number of activities. It has clear applications to financial planning and investing. He begins with the why, then takes a wider view to include the how, and finally, the what. Your own investing "why" is unique to your situation. But there is one thing that everyone has in common: To offset future liabilities. Money is the fuel that allows you to grow your businesses, support your lifestyle and plan for the future.

You need income clarity

Creative entrepreneurs often have inconsistent incomes from month to month. One month you may sell a few copies of your book or a piece of art and see a dramatic increase in your income, but see no sales the next month. It can be very hard to budget and plan ahead when your income is so inconsistent. If you are creating products, it’s helpful to figure out which ones are the most profitable, which ones you enjoy creating the most, and the ones that create the most stress or drain on your time. Sometimes, the best option is to eliminate the ones that are bringing you the least income, or causing you the most stress. The considerations are more than just financial, you should consider the emotional profit as well. Listen to this episode to hear more great tips on how to gain income clarity!

Eliminate, delegate, automate

Remember to eliminate the things that you don't need, delegate as much as you can and automate everything. By delegating and automating, you can remove some of the stress of financial planning. This can clear up space so you can focus on creative things, hobbies and passions, and overall create a better quality of life!

All income should flow from the mothership account

If you are an entrepreneur who needs a strategy for your finances, consider the “Mothership” approach. All of your income should flow into one account, so you can track it. After that, I recommend setting up five separate checking or savings accounts. Your first one is the emergency fund account. Figure out what you can contribute each month, then automate this deposit. The second account is for your taxes. Since you are working for yourself, this is an important step to remember. The next account is for intermediate goals, like a downpayment on a house or a new car. After that, create a salary account. This account covers your daily needs, groceries, gas, entertainment, etc. Lastly, you might consider an account for the future, like an IRA account or another retirement option. Check out episode 4 and 10 for more information on the “bucket system” and IRA planning with Dustin R. Granger, CERTIFIED FINANCIAL PLANNER™.

Outline of This Episode [1:22] Danielle shares the importance of creative budgeting and strategy for entrepreneurs [5:15] What is your money “why?” [6:15] Create a system to track income and expenses [6:45] Why you need income clarity [9:15] How you can eliminate extra costs, delegate tasks and automate the process [20:00] All income should flow from the mothership [27:00] revisit often [28:45] Toujour Worth financial planning service Resources & People Mentioned Showmeyournola BLOG Connect With Danielle and Dustin Ask your questions! On Facebook On Twitter Connect with Dustin on Twitter: @DRGranger