Amer Qureshi<\/p>\n
I work with many individuals who have embarked on their entrepreneurial journeys. They have done so for various motives: some seek independence, others aim to shape their own destinies, a few strive to live out their dreams, and there are also a significant number who embarked on this path without a clear purpose; it just felt like the right thing to do at the time.
\nWhy have you chosen to venture into business or why do you aspire to do so? I vividly recall the anxiety and tension I felt the night before I launched my own business some time ago. Initially, I had two fundamental goals: to establish a reputable firm of accountants and business advisers, and to generate sufficient profits to live comfortably.
\nGiven my profession as an accountant, it didn\u2019t take long for me to realize that, in order to achieve many of my professional and personal aspirations, my business needed to operate at peak financial performance. Regardless of the reasons behind starting your business, some degree of financial success is indispensable for its survival.
\nAsk any successful business owner, and they will attest that responsible financial management is the cornerstone of success. Conversely, the downfall of numerous businesses can be attributed to a lack of financial acumen, or, to put it simply, an inability to handle finances.
\nIf a business consistently operates at a loss year after year, there is typically only one outcome\u2014it ceases to exist. Smaller enterprises frequently go out of business, although it rarely makes headlines. Nevertheless, the collapse of each business causes considerable distress to its owners and those involved.
\nTo thrive in your own business, you must have the ability to earn money, manage it effectively, and make wise investments while minimizing your tax obligations. Failing to do so will leave you with little to show for your hard work. Managing finances becomes even more challenging when your business is experiencing rapid growth or, conversely, is in a state of struggle.
\nWhile businesses require financial resources to survive, grow, and prosper, you also need money to sustain your lifestyle and pursue your personal goals. The financial goals and choices you make are often influenced by the revenue generated by your business. In small and medium-sized enterprises (SMEs), there is a direct link between the performance of the business and the personal affairs of the owners. The better the business performs, the more benefits you can reap.
\nYour primary professional objective should always be to ensure that your business operates effectively, enabling you to achieve your personal goals. It\u2019s undeniable that we are all unique, with distinct needs, desires, priorities, goals, and aspirations. However, depending on your life stage, you may find commonalities with your peers.
\nIf you\u2019re just starting your own business at a young age, your financial objectives may include purchasing a home, saving for your children\u2019s education, and acquiring symbols of success like brand-new vehicles.
\nAs you grow older or gain more experience in running your business, your priorities and, consequently, your financial challenges will likely differ from those of younger entrepreneurs. Your focus may shift to paying off debts or acquiring a larger home as your family grows. Achieving a balanced work-life relationship may also become a priority, and you may begin considering building assets outside of your business, as well as strategies for expanding and developing your business.
\nWhen you reach \u201cmiddle age,\u201d your priorities will change once again. You will be less inclined to take substantial or unnecessary risks and more concerned with steadily increasing your wealth. At this point, with your children likely grown and independent, retirement funding will become a significant focus.
\nThe initial question to address when you decide to take charge of your financial management is, \u201cHow much money do I need?\u201d It\u2019s an intriguing question, isn\u2019t it? To guide your thought process, I\u2019ve broken this question down into three points: first, how much money do I need on a monthly basis (to cover living expenses, mortgage or rent, education for the children, occasional holidays, and entertainment)? Second, how much money should I reinvest in the business to ensure its growth and prosperity? Finally, how much money will I require to fund my retirement?
\nThese three questions encompass short-term, medium-term, and long-term financial management. It\u2019s essential to contemplate them earnestly and take proactive steps towards managing your finances. The best time to start was yesterday, and the second-best time is now.
\nThe writer is an Australian Chartered Accountant, International Author and Management Consultant. He can be reached at amer@amerq.com<\/p>\n
Courtesy<\/p>\n","protected":false},"excerpt":{"rendered":"
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