Top Personal Finance Tips for Entrepreneurs

It all comes down to dollars and (common) sense.

Being an entrepreneur means approaching many things with a different eye — including personal finance. As you’re starting and growing a business, you might face undulating cash flows, loans and risk. Learning how to effectively manage your money sets you up for long-term success and builds additional security when times are leaner.

Of course, one of the most important ways to secure financial success is to set goals — and stick to them. Your goals should be practical and attainable based on your situation with a realistic time frame. These could be paying off debt or putting a certain amount of money in savings or investments — what matters is that they help you navigate to where you want to be. If a goal looks too daunting, divide it into smaller goals, ones that are easier to check off and give you the satisfaction of achieving something.

Rigidity and discipline are integral elements of any entrepreneur’s life: success, whether financial or creative, only emerges when we work towards our goals consistently.

Here are some of my top financial tips for entrepreneurs to make smart decisions and help ensure a stable financial future.

understand your relationship with money

Everyone’s relationship with money is different, and discovering yours is a crucial foundation for your decisions going forward. A great place to begin? I was gifted The Psychology of Money by Morgan Housel (Amazon | Barnes & Noble) and it’s a fantastic study of how our behavior — inborn, cultivated through our childhood — shapes our approaches to finance.

Spreadsheets and formulas might suggest best practices and there may be “rational” choices when investing or paying off debt. But good financial decisions are much more nuanced and often aren’t governed by data. Through short stories about the odd ways people interact with money, Housel helps dissect how society, personality and childhood impact our financial decisions.

Look at profit first, not expenses

One of my other favorite methods for personal finance comes from Profit First by Mike Michalowicz (Amazon | Barnes & Noble), which offers insights into how small businesses can break out of patterns that disrupt profitability. Traditional accounting says profit is sales minus expenses. Michalowicz says we have it backwards: sales minus profit should equal expenses — he writes that this is how small businesses can start to generate greater amounts of revenue.

Mastering this concept earlier can be instrumental for your company: companies that are profitable from the beginning are more likely to succeed in the years ahead.

prioritize constant learning & critical thinking

I highly recommend Garrett Gunderson’s book Killing Sacred Cows (Amazon), which strips back some of the most prevalent myths around finance, disputing typical advice about money. Garrett is a personal friend of mine and I love all of his work. His philosophies are built on the concept that much of common knowledge about wealth is just a myth and achieving true financial success requires being more honest to yourself and your passions. He emphasizes learning the rules and principles around finances and traditional advice, arguing that anyone should be able to achieve financial success, as long as they approach their choices with a critical eye and a deep understanding of the industry.

Get a family office

A family office is a concept I can’t stress enough for business owners, and one that ties into Garrett’s writing. A family office is multi-faceted, with accountants, attorneys, investment advisors and more — everyone you need to achieve financial success and independence. They can help design, develop and tweak your finances, from cashflow plans to liquidity, asset management and tax strategy, helping you balance your finances on both the personal and business fronts. You don’t have to be wealthy to have one, but having a unified team supporting you will be invaluable for your entire family. My personal recommendation is Vital Wealth, led by Patrick Lonergan.

The key takeaway should be that there is no secret to wealth or financial freedom, just as there is no magic formula for entrepreneurship. Instead, it requires educating yourself, reading widely, opening yourself up to different perspectives and thinking critically to make the decisions that are right for you.

Navigating life as an entrepreneur can be difficult — and there’s no better help than from someone who has experienced it themselves. I offer consulting services for entrepreneurs of all stages to help them take their careers to the next level.