As with any other aspect of your business, choose your tools carefully for the long-term management of your finances.
Of course, credit and deposit accounts in the name of your business will help build the company's credit rating — and likewise prevent a problem at the company from affecting your personal credit.
If monthly expenses tend to be up one month and down the next, a credit card with a revolving balance feature can help you manage cash flow and deal with the fluctuations. On the other hand, a charge card is good if you know you can pay it in full at the end of every month and just use it as a tool to manage expenses within the payment time frame. With no pre-set spending feature it gives you the flexibility to manage unpredictable expenses such as entertainment and travel. In either case, you should look for the other benefits you'll use most, including insurance, reward points, and member discounts at your most often used business vendors.
Savings and checking accounts should always be selected for best fit and kept separate. Interest-bearing accounts, or sweep accounts that move money into high-interest opportunities overnight, are helpful if you keep a large average balance. Overdraft protection might be more important if your balance tends to be low.
Consider whether the accounts — and the institutions behind them — will make your life easier or harder. The best accounts will link to each other, download into your accounting software and have 24-hour customer service with web access. Don't settle for less. Having the right accounts, with the right benefits, at the right institutions, can make the difference between running back and forth to the bank and running your business.
Finally, remember too that the tax man likes to see exactly how you've spent your money. Keep business and personal accounts separate. Hang on to all your receipts, or at least be sure your accounts provide good reporting, with quarterly- and annual-statement summaries. Even the most complicated income statement, expense report or tax return will be a little easier with good reports.
Start smart
Starting a new business is exciting — but it can also be financially dangerous. Before you take the plunge, have adequate insurance coverage for worst-case scenarios. That means life and health insurance for you and your family, in case anything goes wrong. It also means long-term disability insurance, life policies on key employees or partners and adequate liability insurance for the business. Insure yourself by holding back some reserves, too. There's no reason to put every penny of your savings into a brand new business. Always keep reserves for unexpected problems, market slowdowns and to finance growth.
Personal perspective — retire rich
Most entrepreneurs love what they do and can't imagine retirement. That sentiment builds strong companies, but may not ensure a comfortable life when old age, infirmity or death severs them from their business. A rich retirement requires careful planning at every stage of life.
Personal considerations
Just owning a profitable business can be enough to provide for your future if you make the most of it. This can be as simple as making sure that you set aside savings whenever possible. The discipline to live within your means, and to balance expenses with savings, can ensure a golden retirement, regardless of what happens to the business in the long-term. But saving by itself is not enough. Pay as much attention to your investments as you do to your business and you'll be on your way to a secure future. Balance your total risk by investing in lower risk asset classes such as real estate and whole-life insurance. Both of those assets can grow significantly in value while also providing income and liquidity.
Make an early withdrawal
Remember that your business was built to serve you, not the other way around. As soon as you have the opportunity, do not waste time: Boost your personal wealth by taking some of your money out of the company. That might mean selling a piece of the business to employees or partners, or simply increasing your own salary.
Sell high
The sale price of your business will probably be the largest single factor affecting your wealth and your retirement. But the best price might not be available at the exact moment you want to retire. Do not wait: Remember that timing really is everything. The best time to exit your business is during strong growth and high profitability. If you are getting unsolicited offers to buy the business it may be a good time to sell.
Finally, make sure that the sale terms match perfectly with your personal financial needs. Be sure to get a qualified financial planner, C.P.A. and lawyer involved as early as possible.