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6 Financial Must-Dos for First-Time Entrepreneurs

Learn how to put the systems in place now to ensure the long-term health of your company, and build it right the first time.

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Through experience, I have learned it is far better to take the time upfront to build the systems necessary to grow into a self-sustaining enterprise. When I started my financial services firm in 1977, my goal was to still be in business in 1978. While I was surviving, I was also building systems because, at some point, I wanted a real, living business — not just a job that I owned.

 

Starting a Business, Starts with You

Many startups are financed with capital that comes directly from the founder. If that’s your case, then it’s especially important to put your own personal financial house in order before you do anything else.

I recently worked with a young man who started a handcrafted furniture business after he graduated from college. The first thing we did was calculate his personal budget: his rent, student loans, and all other personal expenses. The total was $42,000, including income taxes. His personal cash flow budget is the largest expense of his new business.

His total burn rate, including all the other expenses of his operation, was $110,000 a year. This tells him the amount of gross profit he’ll need from sales to break even. He keeps meticulous records, and doing his homework, first, sets him up for success.

When you are just starting out, you can often get by on sheer determination. But at some point, a business needs to have a life of its own. A business that stays in adolescence for too long often collapses in on itself because the owner runs out of steam and can no longer sustain 80-hour workweeks.

So, put the systems in place now to ensure the long-term health of your company, and build it right the first time.

 

Steve Musick is the CEO of Destiny Capital, a financial advising firm he founded in 1977. In addition to wealth management, Steve is an author, speaker, and lecturer on the subject of entrepreneurial leadership. He recently launched Empowerium as an entrepreneurial platform to fuel business growth. Connect with Empowerium on Twitter.

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