We are seeing some great finals football. The teams that succeed have all aspects of their game and team working well and together. In the same way a truly successful business person focuses on developing their business investment and their personal investments at the same time. 

We have all heard of people that have had good businesses and when it came time to sell or retire they had very little. I’m sure you went into business to do well for yourself and your family. How do you ensure this happens?

This takes some self discipline. It is a very common response to live lavishly when the money starts rolling into the business. We think there is plenty of time to invest for the future. The trap is that business, and life, is not a straight upward line. Things can go wrong no matter how well we manage them. 

Hence setting some good disciplines makes a big difference. The most important discipline is to keep the business finances separate from your personal. Don’t see the business cash as yours to use for personal items. 

The first way to keep the cash separate is to Pay yourself a wage from the business when you pay your staff. Make it a commercial wage with tax deducted and super paid. This way you reduce the big tax bills at the end of the year that suck cash. Also paying super means you are building an asset outside of the business. 

The second is to manage your personal expenditure. A personal budget is good. However if that is not going to work for you, then a simpler approach is to have two bank accounts where your wage goes into. One is for spending during the next fortnight. The other is for larger lumpy expenses like electricity and council rates etc. 

In the early days of a business it often needs as much cash it can get while it grows. However by the 5th year it should be in a place where you can take some profits out on a monthly basis. 

These profits could go to pay your home loan down faster and start making small safe investments. You may also want to purchase a commercial property for your business. As long as this makes good financial sense from a commercial rental perspective and from the business perspective then it could be a good investment. 

It is smart if these investments generate enough income to support themselves and not suck cash from the business. Even better still the investments make a positive return and can be reinvested and accelerate the investment growth.

The key to a successful business life, as it is with a sporting team, is to work on all aspects. For a business owner this means working on both the business and the personal financial side, and to start now. It is never too late to start!