Are you ready to make smarter financial decisions?
If you're a new or established business owner, there's no one-size-fits-all strategy for financial growth and security. As a small business owner or entrepreneur, you've probably come across countless tips on how to save or budget for your business. Los Angeles-based Certified Financial Planner David Rae of FinancialPlannerLA.com puts a distinctive perspective and spin an on financial wellness. Rae's philosophy is "making smarter financial decisions so you can live your best life. And, budgets aren’t about cutting back, but spending money where you see the most value and enjoyment."
As you strategize your financial plan, consider Rae's financial wellness tips.
Set up as the right type of business entity
Make sure you are set up as the right type of business entity — Sole Proprietorship, S Corp, Partnership or LLC. What may have been best in the past, may no longer be optimal if your business has grown.
Focus on profit
Focus on profit rather than simply looking at revenue. It’s not what you make, but what you keep. Many businesses out there just keep growing their revenue and workload, but end up not making any additional profit.
Opportunity for small business via the GOP Tax Bill
With the GOP Tax Bill passed, there is even more opportunity for small business owners to be proactive and minimize the tax drag on their businesses. There is a new 20 percent deduction for profit on pass through entities. This benefit is limited to single filers with adjust gross income below $157,500 or $315,000 for married filing jointly. If you are anywhere near or above these numbers, strategic tax planning will be even more valuable to you in 2018 and beyond.
Business vs personal finances
Draw a line in the sand between business and personal finances. As your business grows, it can be easy to commingle funds, which can be a nightmare if you ever end up in the sights of an IRS audit. By separating your business and personal finances you can determine how profitable your business really is, and it can help you get a proper value when it is time to sell.
Pay yourself first
Always pay yourself first. It is tempting to plow every cent of revenue back into building your business. However, don’t forget to sock away some money for a rainy day and even retirement. If you don’t, you may not be able to weather a storm when it eventually hits.
Set & keep financial goals
Like any kind of New Year goals, it's sometimes tough to stick to them. Set financial goals and find someone to help hold you accountable in reaching them. Whether that is a loved one, colleague, business coach, or even financial planner. The new tax bill is complicated for a reason. The more complicated the tax code, the more loopholes you can potentially maximize to your business and personal advantage.
This article was written by Marie Flounoy for Small Business Pulse