Want to Handle your Business’ Finances? Start Off with Your Own

I am currently at the stage with my own business that I am needing to analyze different costs and create a revenue model to see what a balance sheet may look like now and in the future. I am writing down all the possible start-up and variable costs associated with conducting business and projecting those over the next several months. I’m also trying to come up with possible ”if-then” situations for the potential revenue and income that may come in. These are very important to me as I am still working my day job and the net income that I bring in from the business, the loans I may need to pay off, the personal capital I need to give up all factor in when I can quit my day job and focus solely on growing my business.

If your personal finances are in a mess, how are you going to manage the finances of a growing business?  The financial literacy of citizens of the United States is atrocious, especially for such a ”wealthy” country who puts such strong values on economics.  Check out some of these articles of financial literacy statistics in the US:

http://blog.seattlepi.nwsource.com/consumersmarts/archives/132892.asp

http://www.sec.gov/news/testimony/ts052306cc.htm

This just shows you that most of the United States can’t start their own businesses if they’re handling their own finances (which is usually going to be the case).  LESS COMPETITION FOR US!!  Great.  Well, if this is you, and you don’t feel 100% comfortable with your finances, your debt, your investing strategies, handling your expenses, etc., you should maybe look into increasing your own financial literacy.  I am 24 and feel that I have a strangle-hold on my finances.  I went to school for business, but that’s not why I feel comfortable.  Here are some things that I do on a regular basis that I feel keep me financially literate, but also give me a stronger business foundation:

• Financial Websites:  Yahoo! Finance (finance.yahoo.com) is my homepage on both my work and home computers.  They constantly have great articles related to personal finance, but checking your stocks, looking at real estate, budget/mortgage/loan calculators, etc. is just a click away.  Some other websites I read related to this are www.msnmoney.com, www.cnnmoney.com, www.forbes.com/finance, and www.marketwatch.com.  Just take an interest into reading all the articles on these websites daily or weekly and you’ll start to do things differently related to your personal finances.
• Personal Finance Blogs.  There is a plethora of good information on blogs and number of good blogs to chose from.  Some that I read regularly are:

          -  Get Rich Slowly- www.getrichslowly.org/blog… part of The Money Blog Network (www.moneyblognetwork.com)

          -  Personal Finance Fun- http://personalfinancefun.wordpress.com

          -  Conservation Finance- http://conservationfinance.wordpress.com

• Read Books.  I read books about business.  Business, in general, but occasionally I’ll read a book solely on personal finance and investing.  READ READ READ.  You’re not going to read books about finance if you’re not truly interested in learning more about getting your finances in place.  They’ll feel like textbooks then.  Always have the end goal of making or saving more money in mind and you’ll find thousands of things you don’t know and would never have known if you didn’t take the time to increase your knowledge and read a book on the subject. 
• Talk about it with Friends & Family.  Use other people’s knowedge about finance to your advantage.  Say you read a book, bring up something interesting you’ve learned and get other people’s opinions.  Start a conversation about your goals of retiring or saving or investing, etc.  People love to talk about money:  primarily, HAVING MORE MONEY.  This is a great way to learn more about others.  I heard about Robert Kiyosaki this way.  I would have never read his books if I wasn’t talking about real estate investing to one of my buddy’s in college… 

The bottom line here is that there is no way that you can become a successful entrepreneur unless you have your financial literacy in-tact.  This means you must also have a clean record with your personal finances.  Learn about expenses, loans, debt, investing, income, taxes, etc.  This will only help you now and help your business.  This will also, help you immensely when you have a massive bank account from owning several successful businesses and you don’t know how to manage the money!