As every entrepreneur knows, building a successful business takes hard work, dedication, and passion.

It also takes a healthy infusion of capital, financial smarts, and savvy risk management.

Small business owners are especially vulnerable to inflation, market volatility, natural disasters, and other cost-incurring events — but partnering with a skilled and experienced financial advisor can help ensure your success. 

Let’s take a deep dive into some crucial insights and advice for entrepreneurs and how you can keep your business thriving.

Get Your Paperwork in Order

The most important thing you can do to protect yourself and your company is to cross all the T’s when it comes to having your company’s various financial and legal paperwork up to date and fully compliant with local and federal laws.

The Internal Revenue Service has a handy checklist for anyone who’s starting a business that includes applying for an Employer Identification Number, deciding what kind of entity to establish and operate as, and how to pay your federal taxes. The Illinois Department of Commerce and Economic Opportunity has an indispensable step-by-step guide that takes you through creating a legal company, all the (many) forms you need, and a variety of other resources for owners.

Depending on your industry, you may need other certifications and licenses, and it’s absolutely critical that you stay in compliance with various government agencies. If wrangling this much paperwork sounds overwhelming, your financial advisor can offer invaluable knowledge and advice. If you can’t afford to pay a professional, there are state and local Chicago programs designed to assist cash-strapped new business owners. 

Invest in Growth 

According to Business News Daily, their #1 tip for SMB proprietors is to make sure you’re paying yourself. It’s vital to keep your business and personal finances and goals separate. 

Many entrepreneurs self-fund their businesses, at least at the beginning, but that can put you at significant financial risk, especially if you’re using credit cards or your own personal savings. It’s key to always have a rainy day fund personally and professionally.

It’s important to explore all of your available funding sources in order to diversify and grow your brand sustainably. While the goal is to have more assets than debt, borrowed funds can give your company the boost it needs to generate more revenue.

Plan, Plan, Plan

Good old Benjamin Franklin once supposedly said, “By failing to prepare, you are preparing to fail.” Planning is everything in the business world, and your strategic plan should be a living document that allows you to evaluate risks, establish milestones, understand your competition, and look vastly more attractive to potential investors.

Market research is essential to the success of any enterprise, and staying on top of the latest industry trends and changes is an owner’s responsibility. Thankfully, there are plenty of software-as-a-service models powered by AI technology that can provide cutting-edge data analysis to help you plan accordingly. 

Of course, “man plans, and God laughs,” is an ancient Yiddish expression, and the events of 2020 and the aftermath of the pandemic demonstrated that adage perfectly. Companies that had adequately planned for unforeseen events were able to adapt and thrive, but many businesses shuttered because they were totally unprepared.

Careful planning will help you assess the risks to your endeavor and manage them appropriately. A regular SWOT analysis (strengths, weaknesses, opportunities, threats) is a valuable tool for evaluating your position and developing a comprehensive business plan. There are online programs that can assist you with creating an actionable plan through this type of data analysis.

Another important aspect of planning is determining your exit strategy and retirement goals. On this note, it’s smart to always have a ballpark idea of your business’s market valuation. Calculating this number allows you to make a plan around selling up and moving on to another stage of life.

SMB owners should definitely offer themselves and their employees a 401(k) retirement plan. This is critical to attracting the best employees and ensuring you’re preparing for whatever the future holds. This is another area where it’s absolutely worth it to work with a knowledgeable financial advisor. 

It’s also crucial for entrepreneurs to have a comprehensive estate plan. This protects your family and your assets when you pass away or if you become incapacitated. If you don’t, your business and funds could be tied up in probate court or disbursed in a way that goes against your wishes.

Establishing Strong Financial Habits

Utilizing intelligent money management tactics can make or break your small business. It’s imperative that you regularly review your financial standing and adjust accordingly. Prosperous entrepreneurs follow a strict budget, reduce excess spending, reduce debt, and optimize their business structure. 

Maintaining healthy habits can put you at the helm of a rewarding enterprise and add to your reputation as a business leader to be respected. Partnering with a trusted financial professional can ensure you’re on the path to success and your business will flourish.

I’ve got almost 40 years of experience in the financial services world, and I love helping small business owners achieve their goals. Discover all the benefits of sound guidance and detailed planning — schedule a complimentary consultation with me today!