Build the Business (and the Life) You Want by Creating Meaningful Financial Goals
For most women entrepreneurs, business is personal, but how often do we stop to consider how interconnected our personal lives are to our business results?
It’s important to recognize the interconnection between your personal life and your business when it comes to establishing financial goals. Our business facilitates our personal goals—and with these goals constantly in flux, our business plan needs to be able to adapt, adjust, and align to our values and ambitions.
Consider this… is your business currently providing you with the personal lifestyle you want?
If your answer to the question above is no, then take the time to identify your personal goals and the life that you want in your future. To do this, Mona Minhas suggests women entrepreneurs reflect critically on the “why” of their business and what type of entrepreneur they aspire to be:
- Do you want a more flexible job with fewer work hours?
- Do you want the freedom to work remotely?
- Do you want to build a legacy business?
Once you identify your personal values as an entrepreneur, you can then work backwards and evaluate how much income you need to be generating in order to fulfill your goals. This involves setting up a detailed business plan that will grow your business and secure your long-term financial future.
Now, there is a strong relationship between personal and business, and often the lines become blurred. Personal and business finances are interconnected—whether that’s investing personal savings into your business to start it, for initial hires, initial products, or even putting your personal money into marketing your business.
But it’s important to set boundaries between your business finances and your personal finances.
Here are some of the ways you can set boundaries:
- Use separate accounts to manage personal and business. Your business account should solely be for your business expenses—-and keeping your accounts separate will help you accurately and efficiently track your spending.
- Make sure to pay yourself a regular salary in order to secure your personal financial security. As women, we often have the tendency to undervalue our worth in business, so think about what you need to be making to complete your personal life goals and pay yourself accordingly.
- Track your budget. Look to see if you are on or off track in your business to keep your personal financial goals and business financial goals separate.
- Navigating the balance between your personal and business finances can feel like walking on a tightrope—at least until your business is up and running and well established. So, pay attention to that and make financial decisions that don’t compromise your personal goals and wellness.
So, what are some of the common financial mistakes – in both business and personal life – that women entrepreneurs might make?
First off, mistakes are important, and we should never feel ashamed of them. We learn and grow from our financial mistakes both as entrepreneurs and as people. Mona Minhas outlines several common financial missteps that many entrepreneurs have experienced:
- Not taking the time to evaluate your business from an outside perspective
- Not paying attention to profitability
- Putting personal money in a company that is not financially viable
- Not turning to financial advisors for guidance
- Not setting up a personal contingency plan
- Not building your business on something you are excited about going.
Key Takeaways:
There is a complex, interconnected relationship between our personal selves and our business selves—where the success of our business can often be shaped by who we are as people.
Be mindful of your personal goals as they are constantly changing, and your business needs to be able to move with your personal goals; define your vision for your company and align it with your personal values.
Set boundaries between your business and personal finances and make financial decisions that don’t compromise your personal goals and wellness. You can accomplish this by using separate accounts to manage personal and business, paying yourself a regular salary to maintain your personal financial security, and tracking both your personal and business budgets.
To avoid some of the common financial mistakes, be sure to consistently check in on your business from an outside perspective, measure profitability, recognize when the business isn’t financially viable anymore, seek out financial advisors for help, set up a backup financial plan, and make sure you are passionate about where your business is
The Finance Cafe would love to send a huge thank you to Mona Minhas for sharing her incredible insights in this week’s podcast on how to build the life you want through navigating both your personal and business finances.
For more information on the interconnectedness of business and personal finances and the importance of setting boundaries between the two, the common money mistakes entrepreneurs make, and why we need financial role models, check out The Finance Cafe podcast!
Here at the Finance Cafe, we want you to feel empowered by numbers and the stories they create for your business, and we hope to inspire women entrepreneurs like you to critically consider both your personal goals and business goals as you embark on your entrepreneurial journey.
Join us here weekly to learn more about unlocking your full potential as an entrepreneur and uncover the financial story of your business, one number at a time.
Excited to be part of your entrepreneurial journey,
Shannon Pestun & Shauna Frederick
The Finance Cafe
The Finance Cafe