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What Do You Really Desire Financially

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5 Things Business Owners Desire Financially

I believe that through knowledge and discipline, financial peace is possible for all of us. – Dave Ramsey

There seems to be a common financial concern among business owners that I have met. Very few, if any, have ever asked me for a business model to make better financial decisions.  They have concerns that are phrased a bit differently. Below are 5 desires by business owners. Have you said any of these?

1. “I want to know where my cash going.”

Do you make decisions by looking at your bank account?  Do you wonder how you are always out of money but are working so hard and bringing in more and more revenue? I remember when I was young, we had a board that we would write quotes we made up to be funny. My brother had a profound quote he wrote on the board. “Money goes away!”  It certainly does and it is very easy to lose track.  It is very important to understand your cash flow not only during the month and each week but also throughout the following 12 months.

2. “I want to pay Uncle Sam less.”

Nobody wants to pay more taxes. I spoke with a potential client that spoke of his main concern as paying less in taxes.  With only a paper checkbook as a financial record, it would be rather time-consuming to piece it all together.  No matter how small or large you are, any kind of tax planning would require a forecast. You have to understand your potential revenue, profit, and cash flow to understand ways to best reduce your tax liability.

3. “I want more peace and less stress financially.”

Don’t we all want more peace?  Financial stress can be some of the worst stress because it can be debilitating. If you have financial stress, you know you need to spend money but don’t have the money or cash to spend.  When we are stress, we must take action.  What action do we take?  It is best if the action is coordinated toward a specific goal.  Your financial goal will be developed in a forecast model for your business.  Just the knowledge and understanding that your actions are moving you toward a financial goal is less stressful.

4. “I want to know when I can hire an employee or contractor.”

Eventually, any business gets to the size that you need contractors or eventually employees to grow more. When can you afford to hire someone?  Most people look at the workload and hire when they feel they need it.  Unfortunately, feelings can lie to you. What happens if the employee takes more time to get up to speed than you thought? Can you go 90-180 days without much productivity from your employee? Do you have the cash to last that long?  Many times it is best to start with a contractor and work up to employees.  A financial model will help with this kind of analysis.

5. “Do I need to borrow or get an investor?”

It seems common for an entrepreneur to think they need to borrow money to start a business. I worked for a small business and started my own with no debt. I do agree that having some savings is very helpful but you don’t always need to borrow money or get investors. Now, in some cases this is necessary. It really does depend on what business you are starting. A forecasting model will help you decide not only if you need to borrow or raise in the capital, but it will also tell you how much.

We all desire the final result. The desire is more cash now and to pay less in taxes.  We want more peace and to sleep better. Also, we want our business to grow faster or to get help from employees that are ready to go on day one. It could be that we are impatient and don’t have time for all the steps. But, we have to follow the steps. As we walk down the trail or business ownership, there are steps we take us to reach the destination we desire.