8 Essential Financial Fundamentals often ignored by the Entrepreneur
April 28, 2018 | Category: Future Planning
| Author: Jim Chilton
Breaking away from the norm...they’re not an Employee with a Benefit Package. No Open Enrollment for their Health Insurance. No Supplemental Life Insurance. No establishing their 401K. No Maternity Leave Benefits.... no, no, no and none. Zip. Welcome to the world of the grinding Entrepreneur. Going solo. Alone.
Whatever position that “Lone Wolf” goes in their daily duties, there is one fact that the light shines upon with that “Success Seeking” individual...Benefits and Financial Literacy still calls for action, attention, and execution. There still remains those 8 Financial Essentials for them to address:
1. Awareness. As stated, the Benefit Dept. not only is closed, but it never opened. For the typical Entrepreneur, the idea of building a Benefit Package for themselves is a crucial necessity, usually ignored- until some personal calamity befalls that individual. Then, as we all know, it’s too late.
2. Positioning. The attitude and call- to- action of that Sole Proprietor, must be prioritizing themselves as #1, Profit as #2. Protecting against Risks. Learning. Establishing various Benefits and Programs that solve their issues of Financial Security: Retirement, Disability & Illness, Tax Favored Investing, Cash Management, limiting and reducing Individual or Business Debt, hiring and retaining Employees. All of these must be addressed as their Enterprise evolves.
3. Time. Other than depositing money systematically into various Savings and Retirement Vehicles- or installment debt- the understanding that time, with money, can create or solve many issues. The enemy of this, Procrastination, may wipe out a lot of dreams by that Entrepreneur delaying the initial launch. The idea of ignoring the power of time can be a fatal weapon destroying out one’s future Financial Security.
4. Discipline. This is a total Behavior issue, that everyone- Employees, Retirees, Entrepreneurs- all deal with. People are wired a certain way. Self-discipline, to do what’s needed, is a monstrous impediment for many. Simply put, you do the right things at the right time, or you don’t.
5. Periodic Review. This is a oxymoronic issue for the Solo Business Owner. As for their Business, Review is a constant duty to their success. They’re all over
works, what doesn’t. Ask them the last time they reviewed their Benefits. The Repetitive answer is, “Yeah, I’ll get to it shortly”. Mañana thinking kills the deal.
6. Diversification. If you think about it, having a complete package of Benefits solves this issue. Yet, when you realize the amount of Entrepreneurs who have placed 100% of their money in one item (Stock, Mutual Fund, Money Market, CD) it’s pathetic, to look back, realizing what those returns may have paid out by diversifying. .
7. Target Knowledge. This is easy for the Entrepreneur, but scary Financially speaking. They know their Product or Service better than anyone else. Their livelihood depends on it. Yet, purchasing specific Products for their Benefits, its usually a “Hurry Up event”, with little insight or knowledge. Again, this lack of concern may show up as an inadequate result to that individual, when it’s needed most.
8. Accountability. Holding up the mirror to what one does, is often at times, impossible to do. Having a “Buddy” System- someone who holds that Entrepreneur accountable to their goals or Business Plan -often spells the difference between winning or losing, having it or not. The “No Spin” measuring is a terrific way to not going off the rails.
Doing better is a never-ending quest. These 8 Essentials of Financial Literacy for the Entrepreneur is not a potion for success. What they are designed to do is remind that special go- it-alone guy or gal to never let the Financial Fundamentals take the back seat to their Business...ever.
Jim Chilton is Founder and CEO of the Society For Financial Awareness
(www. SOFAUSA..org) a San Diego based, Nationwide Non-Profit, founded in 1993.
He is writing a Guest Column for the U-T as part of National Financial Literacy Month.