A business is the fruit of personal finance tree
Your personal business isn’t just another source of income for your personal finance. It can deliver saving solutions/methods for your previous budget plan. A successful business can make you financially independent for many years, if you know how to manage and to organize your finance plan. Start a business with your “available money”. Don’t hurry and take out loans, as that could transform into the killer of your business and make you a debt slave. Start small and grow step-by-step. This is how you will be able to allocate funds to the growth of your business on a monthly basis.
Even if your business yield you great income, don’t rely solely on it. The market is unpredictable, so it is better to keep all the options open. Try to find business partners and don’t be greedy, let them take a share too. Working as a team will benefit you better than wearing yourself out just to gain more money.
Learn to be disciplined about your personal finances and treat them with all your seriousness. It build your financial behavior and will be the pillar for the background of your business.
Obviously, both your personal finances and your business are important issues of money and financial survival; and your own enterprise is, basically, just another activity that produces income for your personal finances. Or, at least, this is the first link between these two that one could think of at first.
Thoroughly looking, though, you realize that there are many other liaisons between them which lead to different financial behavior, and you can see this at those who surround you.
What Comes First?
This is a tricky question. Theoretically, personal finance should exist before the appearance of your own business. You have been dealing with Mr. Money since you were a kid. You had to learn to manage your money long time ago before having your own business.
The vast majority of people work with money, but they don’t have the smallest clue about personal finance. They earn and spend money by “instinct”, following immediate needs, without an action plan. In most of the cases, this is generated either by a low financial education or by a routinized style of living. It is much easier for those who know how to structure their personal finance to start their own business than for those that live using the “carpe diem” motto.
Personal Finance means:
- Clear knowledge of the income sources;
- Knowing the expenses;
- Continuous watch over income and expenses levels;
- Making a budget;
- Savings;
- Investments;
- Pension plan;
- Kids plans;
If you didn’t tick at least three points from this list, then it means that you haven’t established a personal finance plan yet. Now comes the tricky part: do you know that there are lots of people who start a business without having done a personal finance plan? They use their instinct and believe in the originality of their idea, leaving all concerns aside.
This one is the biggest reason why most people fail to establish their own business. They don’t treat financial education at its proper level and don’t have a strategic plan of actions. How could you manage a business if you aren’t used to cope with your actual finances?
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