Entrepreneurial Wealth 101: How to build up sustainable wealth as an entrepreneur?

Entrepreneurs can agree on the fact that entrepreneurship is not a mere walk in the park hence a lot of people giving up, but then again there is one thing that all Successful entrepreneurs can agree on which is the fact that financial literacy is the key to business wealth. Managing the balance between taking risks as entrepreneur and making sure that your finances are well positioned is the difficult but crucial part of wealth development in entrepreneurship. Here are some few notes that are guaranteed to assist you in entrepreneurial wealth building if followed precisely:

1.Never keep your financial “eggs” on one bucket (Your Business) – It is relatively difficult for most entrepreneurs to invest in any other place than their business and that makes complete sense, honestly. But we should try and be realistic with this, Businesses do fail at some point or rather go through some rough patch and I would be a train smash if you your business happen to fail and all your assets are invested only in to the business. It is essential to make sure your financial investments are placed in different places of investment, so should your business takes a downward spiral you know that you are covered, you other investments are there to boast you personally and your entity.

2.Set yourself a fixed “Income” that you receive from your business per month instead of chowing all your business profits – This one here is a very big one! Some people associate their businesses a lot with themselves in such a manner that they believe every profit the business make every month automatically belongs to them, which is absolutely incorrect. Your business (Entity) will have zero potential of growth if the profits are spent by the owner instead of being used in upgrading the business and investments. As any other person who puts in labour in business you deserve getting compensated but your compensation should not be in a form of your business’ profits and your compensation should be a fixed amount that in in no relation to what your business make, For an example: If your business generates $500 profit in month A and $2000 in month B , if you have set that your fixed income is $300 Per month then it should be exactly that for every month and not increase on month B just because your business made more profits in Month B.

3.Bad debt is your biggest enemy, AVOID It! – There is good debt and bad debt, the difference is that one is more likely to be profitable in the business and the other one deprives business wealth growth. Before a business engage itself with debt they first need to analyse if the asset the business wants to acquire through debt will not lose its value quick and look if that asset will be profitable in any way. When purchasing an asset on debt there is an amount of money that is added from the actual price called Interest. So now if a business purchases on debt, they end up paying some amount of money that they should not be paying from the first place, and that is bad debt. An example of a bad debt in business is purchasing office stationery on debt, this stationery can get stolen or get broken and lose its value in maybe 6 moths of purchase and the business will have to continue paying for maybe another 6 months for something that has lost its value.

Here they are! Guaranteed notes to assist you reach your business goal, being financially wealthy when followed and implemented!

Please note: The Information provided on this article is not professional financial advice. Please consult with a licensed professional for advice.

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