financial well-being

Take These 5 Steps to Establish Financial Well-Being as an Entrepreneur

If you’re an entrepreneur, you probably work all of the time. That’s because you wear many of (or even all of!) the “hats” in your business. You are the CEO, the bookkeeper, the vice president of sales, the chief marketing officer, the head of manufacturing and more. Even though your vision led you to create your company, you now find it difficult to see beyond this month because of deadlines, purchasing, manufacturing, advertising or HR concerns.

With the pressure of starting and running a business, many entrepreneurs think they can’t afford to plan for their financial future.

According to SCORE, which offers free business mentoring and education tools, 34 percent of small business owners do not have retirement plans for themselves, and 40 percent of business owners lack the confidence that they will be able to retire before the age of 65.

Having a defined, sustainable financial planning process in place now can help you build your financial peace of mind later. Here, I’ll show you how to create your own map for financial success.


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Create your financial map in five steps

Creating a financial plan is a bit like the sport of orienteering. Orienteering helps participants build their map-reading skills as they navigate from their starting point, crossing sometimes-difficult terrain, to emerge at the finish line first.

Along the way, racers must check in at certain points on the map to show that they have reached the correct location. These “checkpoints” ensure that participants stay on the right path.

Use the same analogy and framework to navigate your way to financial well-being with these steps:

Develop your own “master map”

In orienteering, competitors study a master map of the course and, beginning at a common starting point, choose their path to reach the finish line. They also identify the challenges or obstacles they face and the location of checkpoints where they will receive a stamp or punch on their race cards ­­— that way, they ensure they won’t be lost.

For your financial master map, take meticulous inventory of your financial situation. What are your strengths and challenges? What do you own, and what do you owe?

Be sure to include any investments, life insurance policies, employee benefit statements, brokerage statements, wills or trust documents. What are your personal, professional and family goals? What causes do you support now, and how would you like to continue supporting those causes in the future? What other interests do you have?

Getting these all down on paper will help you take stock of your current situation and help you brainstorm your path to overcoming the financial obstacles that you face to achieve your goals.



Enlist the help of a holistic, fee-only fiduciary financial adviser

Most entrepreneurs don’t know what they don’t know about navigating their way to financial well-being, so it’s important to get help if you need it.

A fee-only, fiduciary financial adviser does not sell financial products and must place your best interests over those of herself or her firm. When interviewing an adviser, ask these 10 questions to ensure he or she is the right fit for you.

It’s also wise to consult FINRA’s BrokerCheck website or the U.S. Securities and Exchange Commission’s Action Lookup site to determine whether your adviser has been the subject of complaints, sanctions or lawsuits before proceeding.

Automate your savings

The easiest way to contribute to your future self is to automate your savings and retirement contributions, paying yourself first.

For retirement accounts, try to contribute the maximum allowed by the IRS each year. The same goes for contributing to your investments and other savings according to your plan. If you never had the money in your account to begin with, you’re less likely to miss it.

Don’t pay more tax than you are legally obligated to pay

If the financial adviser you choose does not include tax planning as a service, plan to connect him or her to your CPA; they should work with you to develop and implement a 20- to 40-year strategic tax plan to ensure you minimize tax and pay only the amount of tax required.

Be sure they consider multiple strategies, including:


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Revisit your plan regularly

Face it, life happens. You’ll want to revisit your plan more frequently whenever you experience change, such as buying or selling a business, getting married, buying a home, having children, paying for college, going through a divorce or dealing with an immediate family member’s death.

Your financial adviser can help you determine how to update your plan. At a minimum, you should consider meeting to discuss your plan and any life-changes with your adviser at least annually.

This simple, five-step process is sustainable, reliable and customizable to your situation. As an entrepreneur, you have the passion and persistence to turn your visions into reality. Having a financial planning process in place will help you create the long-term wealth you need to support your financial well-being.

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