Running Your Own Small Business Owner? 3 Tips To Plan For Your Financial Future

When you are running a small business where you are the only employee or only have a small number of employees, it is easy to just focus all of your efforts on the financial success of your business. However, you need to make sure that you are planning for your financial future outside of your business as well.

#1 Get A Retirement Plan Set Up

You don't have to give up on a retirement fund as a small business owner. There are lots of different options for small business owners when it comes to retirement funds. You can open a SEP-IRA, Simple IRA, Solo 401(k) or a Simple IRA.

The key is to make sure that you are paying yourself and investing in your own future, no matter what type of retirement plan or set-up you decide to go with.

#2 Create an Emergency Fund

You need to have an emergency fund as a small business owner. An emergency fund will save you if you find yourself in a slow season. You will have the money you need for your personal life and will be able to invest the little money you are making back into your business. A cash fund is also important to have if your business does not work out. If your business does not succeed, you want to be able to pay your bills while you look for your next job or opportunity.

Additionally, it is just smart to have an emergency fund to handle unexpected expenses, such as repairs on your vehicle or to your home. An emergency fund can also be used for medical expenses as well. Build up an emergency cash fund that will get you through more than a few months.

#3 Invest Outside of Your Business

All of your investing should not be made into your business. Just like you would not invest all of your money into a single stock for one company, you should not invest all of your money into your business.

You can invest your cash into low-risk sources such as government bonds and high-interest savings accounts, or you can invest in the stock market, real estate, or other start-up businesses. Just make sure that you spread out your investments across both high and low risk options, and don't put all of your money into one type of investment. This gives your money the biggest chance of growing.

As a small business owner, you need to take care of your own personal finances and invest in your financial future. As a small business owner, you can still set-up a retirement fund. It is really important to have an emergency fund as well so you can support yourself even when your business is slow. You also need to make sure that you are making some of your investments outside of your business.

Talk to a group like Monheit Zongolowicz Frisch CPAs to learn more.

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