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Personal Finances for Business Owners: Mindset and Habit
Manage episode 494403941 series 3527542
In this episode, host Molly Beyer shares a frank talk about using mindset and habit to build good financial practices. She starts with identifying the realities that many business owners have business cash that flows directly into personal cash, and that we’re not managing personal or business finances as well as we could be. Molly’s goal is to give us a deeper understanding of our business finances so we can shift our mindset from financing to funding.
Molly explains income statements and balance sheets, positive net worth, equity, and cash flows. She outlines the importance of all these checks and balances in maintaining a budget and setting a goal of financial stability. There are a variety of vital reasons to start separating personal and business finances, which Molly outlines, and whatever software is being used to track one can also be used for the other. She lays down a guideline for setting up this separation with an understanding of the intricacy of business finance.
The mindset shift from financing to funding is the next step in sorting business finances. Entrepreneurs rely on credit cards, lines of credit, and consolidation loans, which do increase cash flows but come with a high long-term cost. What Molly explains is saving to fund an item rather than incurring debt by charging it. She addresses keeping expenses within our means and the effects of our money management on our credit scores. This episode outlines the first steps in examining personal finance separation for business owners and is an important one for a good financial base.
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15 episodes
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