In this episode Emily Chase Smith provides small business owners with a step-by-step guide to staying financial healthy. In her book, The Financially Savvy Entrepreneur, Chase Smith shows you how to save your financial system from crumbling by teaching you to understand how an entrepreneur’s financial decisions are different from others and to establish a business that can stand on its own financially. This book is perfect for the entrepreneur who is searching for a clear process for avoiding the financial consequences that derail so many small businesses.
There is a lot written on personal finance but I wasn’t finding what I needed for the small business person that really addresses the reality of what they are going through in terms of building a business and trying to dovetail that with their personal life. When your business is really small, what’s going on in your business and your personal life are intricately linked. I wasn’t finding anything that I was seeing on a daily basis with my clients.
There are financial systems that are necessary in your business no matter what size it is and if you are serious about your business that is a necessary thing to learn. I am a firm believer that if you can run a small business, you’ve got this, but it’s not something you have ever been taught. I went all the way through law school and nobody ever taught me any of this stuff, this was information I went and sought out on my own. I think small business owners will be very well served by putting some effort into having that financial savvy because it’s the gift you get to keep your whole life.
This book is directed towards someone who is probably five million in business and who is trying to understand how to bring some financially savvy principles into their business. I start out by laying out how we are different from the regularly employed people and why everything out there on personal finance doesn’t apply to us. We talk about how much time you have to make this business really fly based on the resources you have at hand. We break out what those resources might be, start to put some numbers to them and start to look at how long you have.
There are a couple chapters that talk about exactly what you should be doing with the finances. We talk about how to look at the numbers and how can that help you guide your business.
There is a whole section on drafting and exit plan. I am a firm believer that when you start a business you should know how far you’re willing to go in terms of time, money and effort. The act of just writing those things out is very healthy and hopefully you won’t have to come close to those markers but you know what those are.
We talk about cash flow projection in the book and how to do that. We have a whole section in the book that I call money spaghetti, that idea of entanglement. We identify where you are vulnerable and put together a plan to extricate yourself. And because of my background we talk about debt settlement, negotiation and there is a part on bankruptcy.
“It’s not my quote but I love the concept. “Everything should be made as simple as possible, but no simpler.” – Albert Einstein
I come from an entrepreneurial family; my great grandparents were self-made citrus farmers in Santa Barbara California, my dad has been a self-employed architect for many years and I’m an attorney by education and trade. I morphed that through the experiences I’ve had over the years into being a financial educator for small business.
I had a heavy influence in my legal practice in the area of bankruptcy and I worked primarily with small business owners filing personal bankruptcies. With that I had the chance to be up close and personal in peoples personal and business financial lives. I did this for many years and after a while I started to see some of the same patterns occurring over and over again which was really hard to watch. Working with smart entrepreneurs I realized that if they just had some simple symptoms in place, a lot of them wouldn’t be sitting in my office needing me to file a bankruptcy.
48 Days to the Work You Love by Dan Miller
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Related books: Profit First: A Simple System to Transform Any Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz | Zero to One by Peter Thiel | The Millionaire Master Plan by Roger Williams
Relevant advice and tips: Top Financial Mistakes Entrepreneurs Make When Creating a New Business
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