Protecting your business: Protect yourself.

Until you completely exit your business, one of the most significant actions you can take to protect your business is to protect yourself. This is not to say you should enrich yourself at the expense of your team or other stakeholders, but to make sure you are considering your personal well-being (and that of your family). If you neglect taking care of yourself, you are laying the foundation for disappointment and disaster in the future, both financially and relationally.?

We have found that setting a personal statement of financial purpose can help. This could be as formal as a business Mission/Vision, or even better, a sentence or two in your own words. ‘I want to have the financial means to be able to spend time with my family and travel with them to see every professional baseball stadium over the next 10 years while my business thrives.’ Or you may consider something more philanthropic, values based, or less active. From there, you can start to build out processes in your business to achieve your desired outcome and use financial tools to segment funds outside of your business. Process changes could involve delegating/eliminating certain tasks or batching similar activities to increase management efficiency. The financial tools could be implementing a 401k with tiered profit sharing, executive benefits, or a defined benefits plan that enables you to use tax efficient strategies to help achieve those goals.

Important Action Item: Set a statement of personal financial purpose. If nothing comes to mind, keep asking yourself “why?” Why am I running this business… based on that response… why? There are also financial planning firms that specialize in partnering with you to help you refine your desired outcome. From there, determine what financial steps you can take to start building toward achieving and protecting that outcome.