In the more than 22 years I’ve been working in personal finance, I’ve seen my share of mistakes. Here I’ve made a list of five common errors I warn my clients not to make.
1) Budget. Every business needs one, no matter what size the business. The budget represents boundaries and assures that money will be available when you need it. I tell my clients to make a 1-year plan, and even a 3- to 5-year plan. I tell them that a budget should be respected, but it does not have to be etched in stone.
2) Competent Advice. Find a trusted advisor. A mentor. Someone you trust. Someone who knows what they’re talking about. Especially when it comes to your business and your unique business strategy. Do not trust yourself to know all the answers. None of us do. The best minds in business are the ones that stay coachable, I always say. Just choose those coaches wisely.
3) Time Management. A small business owner wears many hats. You might be head honcho, head of marketing, technology director, social media guru, and chief window cleaner. Then there’s research, design plans, and the sage advice you dole out along the way. Balance this with the demands of your personal life and tell me what it’s like to feel your head spin like a Frisbee. A weekly schedule can be the answer. It gives you structure, a game plan to reference, and this is empowering. When you are on schedule it shows others that you have integrity, and the world responds differently to the few who are self-directed.
4) File on Time. Depending on your circumstances you could be filing annually,quarterly, or monthly statements with the IRS. You might even be filing more often than that. Whatever the case, do it on time. Try never to fall behind in payments or tax returns with the government. I’m not trying to scare you. It’s just that staying off the IRS’s naughty list can save you some headaches.
5) Overdoing it. Avoid spreading yourself so thin that you can no longer provide the service that people want from you. When necessary, bring in qualified specialists to help you reach your goals. When your business starts growing, remember to step back and take into account what you need to continue that growth. Consider investing profits in personnel who can help your business grow even more.
Give yourself the best possible chance to succeed. Put these strategies in place, and feel free to ask me for others.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC
8 April 2012