Successful Business and Personal Finance Decisions
An interesting and valid question to be asked is whether business & finance decisions are interrelated in the levels of perception. Does it automatically follow that a highly successful achiever in business will have the same success regarding the management of their personal wealth! Indications are that this is not the case, perceived as being due to the apparent wealth, accumulated over a significant time, is able to be misspent and wasted in a relatively short time period. This is usually due to poor decisions related to poor financial planning.
Various observations determine that there are two usual mistakes made by owners regarding business & finance. Primarily, they tend to neglect their personal finances, by concentrating fully on their business enterprise and development. Then they are inclined to be unrealistically optimistic regarding business prospects. This could be created by their absorption in growing the business, but failing to provide a support plan should success not be forthcoming.
The disposing of debt, investing in retirement plans and creating external wealth beyond the sphere of their business is critical for their future financial security. This is supported by there being in place a succession strategy for when the owner is on longer leading the business. This would ensure a maximum return related to the business & finance when it is sold.
While the converted wealth from the sale of a business could realize a personal dream, the reality is that a buyer will not usually regard and value a business, with the same perception as that of the founder. It is not as easy to release wealth related to business & finance as is generally considered and should be subjected to significant planning, regarding strategy and time wise.
A personal financial plan should involve professionals in its creation regarding the business & finance aspects. It should also be regarded as a separate business operation with realistic estimates in respect of the wealth likely to be generated by the sale of the business. Simply, it involves the astute business owner giving the same dedication to their personal business & finance as they did to their founding business.