Today discussion is about finance or How to manage company’s finances or Finance Planning. Now, i discuss, how to organize the finances of a new business and if anything changes of an investment strategy that is enabling a career change. Yes, there is a strategy for what I call “Family Business”, whether or not they are married, whether or not they have a family. Let’s discuss a mix of the personal finance planning with the business Finance Planning, it has to be taken into consideration because if you are going to attend a seminar, an event, some financial planning course for a new business, you will see the teacher or the consultant say that it is necessary to separate personal finances business finance.
How starting in the business of franchising, or self-employed, or one who is undertaking a consultative activity, a work activity that depends on himself. He will even try to organize the finances separately, but we all know that when that DARF arrives, that tax collection guide to pay. In the company account, and you have no money in the company’s account. The money that will be to pay that DARF leaves the individual account.
This “Swiss army knife” that is the professional who is turning to be himself president, director of marketing, HR, finance, everything you have in the company. This Swiss army knife he certainly have to deal with a confusion of numbers. It’s not really about separating the numbers, but to organize what is on each side. In the book “Smart entrepreneurs enrich more”, I present a strategy that is to separate planning of a new business in 4 phases.
Planning Managing Financial Activities
Business family finances is a planning divided into 4 stages: First I’m going to segment the plan into two parts, corporate planning and individual planning, whereas the most important is that of the legal entity, of the company, why? Because that’s where your source of income starts, is where you get the winnings, you can make the plans of the individual, if you are healthy in your corporate earnings, if the company is not healthy, it is not successful, there will be no profit, having no profit, you don’t win, without gain, you don’t make any dreams come true.
All planning starts at the company. First point: Draw up plans for the company. The freelance professional, who is wanting to set up an adequate budget for your customers, how do you do that? You have to organize your expenses to understand, how much it costs to perform this activity, both considering the variable cost. For example, you will sell a book, how much does that book cost that you will deliver as well as the fixed cost.The salary of someone who handles the book, have the space you have, rent a garage, has an investment in infrastructure, air conditioning. For example, so it’s important to have a sense of the fixed cost and the variable cost to dilute the fixed cost on a number of products or services. You sell on average in the month, to include in the budget the variable cost plus a piece of the fixed cost corresponding to that service, another expense you had to create the reputation, the brand.
How much did you spend on graduate school, in a technical course, in a college. You have to put the value of the faculty in the service provided? You have to make an estimate how long that acquired knowledge lasts. You finished a degree, you won’t need to do other courses for 3, 4 years? So every service produced, sold for 4 years, will have, will receive, a dilution of the cost of that investment until you make another investment, a graduate degree. For example. In order not to harm your client, value your reputation, your knowledge, your experience so that you charge the right price.
How to manage company’s finances
In business planning, you have to consider that investments. You will have to do in the coming years to keep growing or keep your business evolving. You can participate in courses, congresses, buy equipment, invest in a social network, make disclosures, hire people, the ideal is that you see it in a period, at least 2 years. What steps will be taken. This is the strategic planning of the business.
From strategic planning you pass for business financial planning: Consider the billing you have, of billing you take out expenses and costs. You have to reach profit, many people think that profit is the bottom line of the company’s financial accounting, it is not. Profit is the last line of decision that you take in the company, of this profit you will separate how much you predicted, direct your business, for the growth of your business, in terms of monthly savings.
So if you want to attend a conference, of a course, buy equipment, how much will this cost in terms of monthly savings? That savings will come out of the profit of your business? Ideally, not that you have to borrow, of profit took away the resource that was expected to save, is there anything left? If it’s a young business, there shouldn’t be much left so you can keep growing quickly ahead of competitors. If left over, that is yours, individual. Now you look at the individual side: will have to build a strategy for the individual, to be talking in family.
What are the dreams to be conquered, wants to take a personal course, a gastronomy course, want to take a trip, want to renovate the house, or change the car, savings that must be made to make those dreams happen, identify how much it would cost per month. Now, you look, after defining the family strategy, you look at family finances: How much do you receive per month? How much does the family earn per month? It’s a little bit left over from the business, plus a salary that the partner receives, putting everything together in a family income? You take what was predicted save to make family dreams come true. What’s left is the money you have to structure your cost of living. Notice that, I did the company’s strategy, company finances, family strategy, to identify how much money is left over to define which house I can live in, what car can i have, what clothes can i buy, what will my health plan be, that is, the secret is to have a simpler life in terms of personal cost. So that I can make the growth of my business and the fulfillment of my dreams.
This does not mean depriving yourself to perhaps have a retirement ahead, means making a small short-term sacrifice. So as not to strangle growth of your personal business that is your source of income. With a good investment in the business, knowing how to invest so that it expands, the yield will be increasing, the profit will be increasing. The value to distribute will be increasing, their plans will materialize at an increasing pace. This is it, that you set up your own business so that it grows normally. And ending the reflection with the doubt. How are they when do I migrate from employee to entrepreneur? That portion of personal financial planning does not change, what will change is a new installment in business financial planning. If your investment profile is bold, has a share in variable income, has a historical relationship with an investment portfolio that you acquired with the evolution of your knowledge, it continues, but you add in your planning new business planning which will certainly have more conservative fixed income investments because the variable income of that portion of business that you have it will be the business itself.
Let it be in your professional activity and not in an investment activity that requires monitoring, information, directing the focus to what is secondary, after all, the most important thing is your business. I hope I have enlightened and inspired many people to learn more about new businesses. For those who want more information, “Smart entrepreneurs enrich more” the reading that I recommend to help structure that thing in your head, that doesn’t leave the dream plane, reading will help to achieve this, bring to the real world. Success in your choices.