For entrepreneurs, financial management takes on a new importance as we think about managing both our personal and business finances. How can we be most efficient? What should we watch out for? In January, Brazen St. Louis hosted a Member Roundtable to discuss best practices for entrepreneurs managing finances in the new year to meet financial and business goals.
Brazen St. Louis members talked with our guest experts Kristin Thompson, a Financial Advisor at Renaissance Financial, and Natalea Simmons, a Wealth Management Advisor at Merrill Lynch and had a productive conversation that covered a spectrum of financial management issues for business owners.
Some key highlights from the Roundtable included:
BUILD A TEAM YOU CAN TRUST
First things first, who is your accountant? Who is your financial adviser? Who is your lawyer? Do you trust and like them? Do they understand you and what you need? If your accountant is talking over you, for example, it’s time to find someone else. Make sure that you trust everyone on your professional services team.
FIND OUT HOW THE NEW FEDERAL TAX LAW AFFECTS YOU
There are a lot of questions these days about the new tax law and how it will affect businesses. There are still more regulations to be written as the federal government implements the new tax law, but it’s still a good time to find out how the law may affect you and your business. This may include reviewing how your business is structured.
THINK ABOUT THESE QUESTIONS BEFORE SETTING UP A 401K
There are a lot of questions as it relates to if/when you should set up a 401K or other retirement option for your company – what are the goals? To benefit you, or the employees? Do you plan to pay the cost? How much are you trying to put away? What kind of business do you have? How you are organized can affect your options and how you would set something up. Meet with your advisor to talk through these questions and give you real options based on your business.
CHECK OUT THESE TIPS FOR STAYING ORGANIZED
How to people keep themselves organized on a monthly basis? Various tools/tips included:
-Keep business and personal accounts separate.
-Use Quickbooks – connect to your business bank account
-Use Paper ledgers, if that helps keep you organized.
-Have both a corporate credit card and personal credit card. Charge everything that is business-related to your corporate care and pull credit card receipts.
-Keep track of you expenses by using apps, like mileIQ (for tracking mileage)
-Use PayPal, Square, or similar platforms that also allow you to send and keep track of invoices.
AVOID THESE COMMON MISTAKES
Natalea and Kristin both shared some common financial management mistakes they see from entrepreneurs, which included:
-Not having separate business and personal accounts.
-Not having advisors they trust.
-Failing to build a budget and/or not actually sticking to the budget they’ve made.
-Selling process: Not thinking about exit strategies in advance and not valuing company effectively.
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