Why You Need to Shift Your Financial Mindset as an Entrepreneur

Becoming an entrepreneur isn’t easy, and the ups and downs aren’t for everyone. As an investment advisor, I have spent more than 10 years in the financial industry helping individuals manage their wealth. My goal as an investment advisor is to make sure my clients are well equipped to understand how this career changes will affect their retirement, budget, and most importantly, overall lifestyle. Here are my tips for shifting your financial mindset as an entrepreneur.

Staying Money Smart

Frequently asked: How do you plan to manage your incoming funds? Should you separate your business from your personal checking and savings accounts? Should you use your retirement money to fund your business? If so, how much? Do you reach out to VC firms or a bank, etc.?

Separating your personal and business accounts is important as you become more entrenched in your business. You don’t want to leave money unaccounted for, and that’s easy to do when you blur funds between accounts.

When I work with small business clients our conversation begins with their initial startup costs, their current income, and what they will need to maintain their well-being. We create a plan that reflects all of their income, expenses, and investments, as well as what they feel they will need over the next one to three years. Depending on the client, we initially focus on the one- to three-year plan because it is manageable and not too overwhelming.


Raising Funds

I encourage individuals to pull money from their retirement to fund their business only as a last resort. However, if you must, there are strategic ways to do so, which we discuss and set up for our clients. By taking the time to make clear financial projections you will also be able to tell if you need to consider a part-time job to stay afloat.

When you are determining where and how to seek funding for projects, a good start can be with local non-profits and/or other programs that might offer free opportunities to source funding. There are angel investing firms and pitch competitions you can enter as a way to raise funds. If you can, deliver a trial pitch to your friends and family, approaching them in the same way you would an investor to source funding. If your initial start needs the greater funding of a venture capital firm, bank, or other borrowing channel, it is imperative you do your homework. After that funding is received, make sure you have a strategic budgeting plan for how every dollar will be allocated.

How Do I Keep Up With My Savings and “Retirement?”

As business owners we often forget that we let go of company support when we set out on our own, especially when it comes to retirement and benefits plans.

When we discuss retirement options with our clients it is important that we encompass an overall investment strategy that makes sense for where they are today. Most people end up leaving their employee-sponsored plan at their employer, not realizing that it is no longer being properly managed and/or funded.

It is often in your best interest to move those funds into the most appropriate retirement account to continue to build your wealth. Many of our solo entrepreneur clients find Individual Ks (Solo 401Ks) beneficial to continue their growth, as they allow for unique borrowing opportunities and higher contribution allotments.

After the funds are moved into an appropriate account we determine the level of risk our clients want to take in their investments, and with their assistance, build a strategy based on their vision for the future.

Continue to Be Courageous, but Smart

As entrepreneurs, we dream big and often throw caution to the wind. However, we need to do a better job of managing our money so that we can continue to build upon our dreams and attain the wealth that we want for our families and ourselves.

In my advisory practice we focus on education and have created a wealth education tool called PEAK (Proactively Educating & Acquiring Knowledge) that combines wealth strategy planning with a temperament tool called Personality Dimensions®. This tool will assist you in understanding who you are with your money, so that you can master steps toward furthering your wealth.


Author: Dana L. Wilson has over a decade of investment management, insurance, and financial planning experience and has worked at Merrill Lynch, State Farm, SunTrust Bank, and SunTrust Investment Services. Most recently, she ran her own independent advisory practice, Active Financial Planning, before joining Manhattan Wealth Management to further manage her investment practice as an independent advisor. Dana is also the CEO and Founder of CHIP (Changing How Individuals Prosper), which is a financial technology company connecting individuals to financial professionals of color.

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