When it comes to owning a business, it is always about finance management – both personal and business. You need to know how much cash reserve you have in your personal account in order to survive in a rough market. Similarly, you need to save as much as possible taking into account your personal expenses, not just the expenses related to your business. For a beginner business owner, sites like http://daveburton.nyc/ offer a wide range of financial advice. This information will offer a glimpse at personal financial planning for small business owners.
If you are a small business owner, it is important to handle your personal finance wisely in order to build a solid foundation for your business. This means saving as much money as possible to compensate for the shortages in cash flow, especially during the first year of the business. You should also save yourself with the right type of insurance, such as life insurance, health insurance, property insurance, casualty insurance, disability insurance, workers compensation and so on. Insurance can cost a lot of money if you are not paying attention to the quality of service provided by the insurance agent. The right agent will fetch you the right combination of insurance package for your personal as well as business needs.
Additionally, planning for retirement is necessary when you are owning and operating a small business. Many business owners tend to think that they can earn a lot of money sometime int he future and hence fail to contribute to their retirement account. There are many retirement plans available out there, such as IRA, SEP, Roth IRA, SIMPLE and 401K plans to protect you in your retirement years. A qualified accountant should be able to set up one or more plans that is right for your situation.
Another important catalyst to grow your business successfully is your credit rating. Your FICO score will determine whether or not you are qualified for a business loan and what the amount of loan will be. This score will also help you attract clients, investors and prospects. FICO score is a number that will help you understand where you stand financially, and how you will be judged in the eyes of your creditors and lenders. A good score means you are financially responsible, paying bills on time and are fully aware of personal expenses and living within means. Good score is also an indication that you have a budget for your monthly living expenses and likely to have personal emergency reserve saved for the rainy days.
Personal financial planning also involves planning your tax wisely. This is different from paying your yearly taxes to the IRS. Tax planning is a critical step during the first two years of running your business. So, find yourself an experienced accountant who will not only file your tax, follow the compliance and regulatory filings, but help you devise a tax plan that can save you a lot of money to meet your short term as well as long term goals.