Finance tips that entrepreneurs should know

Grant Barra

Grant Barra is an insurance and finance executive. With a bachelors of Science in Business Administration degree at DeVry University, he is a managing partner at Barra & Associates, an award winning insurance and financial services firm. He started his career at a young age, as an independent agency owner at American Family Insurance in Chicago, Illinois. Barra is also a founding member of GRASH Development LLC.

Who is Grant Barra?

The importance of bank statements

Identify the importance of, not only, your company’s bank statements but your book invoices too. It is also good to know a little of accounting work, some of it can be done through software programs today. Using this data as usable information for your company, this statistics can help you know how to grow profits even further if you know how to read them properly. Through reconciling monthly statements and reviewing general ledger accounts, entrepreneurs are able to make financial decisions about the growth of their company and identify, particularly product lines that may be non-profitable.

How to achieve your financial goals

Are you having a professional to do balance and data with you? You can also do it yourself, but don’t procrastinate, it is much harder to organize the stack of papers once a month than it is to spend a few minutes each day entering details. When you procrastinate, you’re hurting your short-term and long-term financial goals.

Address the risks Part of your financial strategy require to address the risks. Once that is

taken care of, you have the base of your financial plan. Do a budget to actually know with what you are dealing with. For example, for your retirement, you should include strategies to address risks from rising health care and long-term care expenses, risks of market volatility that can affect your retirement savings, risks of inflation that can reduce your purchasing power, and the longevity risk of outliving your assets.

First, The budget Some small to medium companies don’t have the time to

work on  budget. It can be understood, but that doesn’t make it alright. Budgeting is what addresses the risks, and helps you to make better buying decisions. It also gives you an idea of how much you need to your future endeavors and what kind of investments you need to seek. When you have all the information about your business, all the tools in place to help you monitor inventory, expenses, and other unforeseen costs, you can create better budgets that allow you to do more with your profits.

Look for a professional to do your taxes

The worst and most complicated taxes are the ones from small to medium businesses. Without having a profession to monitor and conduct your taxes during the whole year, your business can suffer considerably. They can be inevitable, but doesn’t mean you can’t minimize their impact, you just need an effective plan. You can separate in two levels, in one you may save for retirement in tax-deferred vehicles, while in the other you outline a distribution strategy for converting your retirement savings to income streams that will last as long as you live. Hire a professional to help you with a tax strategy that helps you select various savings vehicles that grow over time to meet your goals while balancing your future tax liability.

Invest in the right time and in the right thing

After your risk-based needs are met and you've maximized contributions to a qualified retirement plan, and still have additional dollars to invest, you can expand your investment strategy. You also don’t have to build your business on new products every time, build onto what you have. Pinpoint where your biggest profit margins come from and look forward to understand who your moneymakers are. After identifying and focusing on these areas, you can build your income and revenues faster, therefore giving you a room to expand in other areas later.

Have a steady income As a business owner, you need to make wise and prudent financial decisions. It

is an ongoing process for your company, you will need to judge and decide on a daily basis. For that having a steady stream of income on hand is important. You need your budget to be right so you know with how much you can deal and a steady income can make all the differences. Don’t wait until you are desperate for funding, and having to show your investors that you are in that place, concentrate on planning in advance and on reducing the risk of a negative situation. Permit professionals for assistance along the way to better manage your money, so it can grow faster than you thought was possible.

Talk about the big picture Keep on communicating your needs, dreams

and aspirations for your business. You don’t need to do something different all the time, but keep on dreaming, make the company your own. As you progress through various life stages and financial levels, continue the conversation with your loved ones and trusted advisors. Where you want to take your company? What are the future plans?     What other fields you will want to invest on? Answer the question from time to time and always try to see the business for its peculiarities, but also see the whole picture and how to improve it.  

Grant Barra