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Personal Finance for Entrepreneurs
Rating: 4.3 out of 5(23 ratings)
90 students

Personal Finance for Entrepreneurs

Helping entrepreneurs navigate business and personal finances
Created byJeff Cornwall
Last updated 2/2018
English
English [Auto],

What you'll learn

  • Effectively manage personal and professional finances to one day build personal wealth.

Course content

1 section • 14 lectures • 1h 30m total length

  • Introduction2:14

    Explore personal finance for entrepreneurs by bootstrapping, separating personal and business finances, and building runway and emergency funds while managing profits, debt, lines of credit, and wealth beyond your business.

  • The Bootstrap Life6:41

    Adopt a bootstrap life by treating personal overhead as business overhead and set a salary. Layer on wants after essentials; stay frugal and avoid loans until the business supports them.

  • Keeping Business Funds and Personal Funds Separate4:06

    Separate business and personal funds from the start by opening a dedicated business account, paying a modest salary, and avoiding mixing personal expenses or risky home office deductions.

  • How Much and When Should You Pay Yourself?9:36

    Entrepreneurs should wait to pay themselves until the business shows stable cash flow and a reserve you can rely on, keeping base pay minimal and distributions tax-aware.

  • Runway and Emergency Funds7:38

    Discover how to set a personal runway and emergency funds, plus a business war chest, with conservative startup budgets, working capital needs, and a plan to reach breakeven.

  • The Three Buckets of Profit5:26

    Learn to manage cash with the three buckets of profits—taxes, growth, and distributions—for pass-through entities, ensuring quarterly tax coverage, emergency reserves, and debt payoff.

  • Good Debt, Bad Debt15:15

    Balance the benefits and risks of good debt and bad debt for entrepreneurs, explaining personal and business debt, credit, mortgages, lines of credit, guarantees, covenants, and prudent borrowing.

  • Keep Track of Your Credit7:41

    Keep track of personal and business credit by monitoring credit scores, cash flow, and loan covenants, and manage debt with accurate records and a financial dashboard.

  • Lines of Credit5:45

    Establish a personal line of credit before starting your business to cover emergencies. Secure a business line of credit for short-term needs, mindful of variable rates and debt.

  • Building Wealth from Your Business8:29

    Assess your business value using adjusted free cash flow, separate personal from business expenses, normalize salaries, reduce debt, maintain assets and inventory, and consider deal structures to maximize selling price.

  • Investing Beyond Your Business6:02

    Entrepreneurs should diversify wealth beyond their business by investing conservatively, maintaining cash reserves, and contributing to a SEP IRA for retirement while professionals manage portfolios.

  • Benefit Programs: For You and Your Employees3:49

    Evaluate expanding benefit programs by balancing health insurance with cash flow, and explore sep-ira or 401(k) options plus disability, life, dental, and vision insurance to recruit and retain staff.

  • Finding and Working with a Tax Accountant5:10

    Find a compatible tax accountant with industry experience, use referrals and interviews, and adopt flat-rate billing to ensure predictable costs while focusing on year-end tax planning to minimize taxes.

  • Conclusion2:14

    Learn how personal and business finances connect yet stay separate for taxes. Plan pay yourself, cash is king, weigh debt, build wealth through distributions, benefits, and collaborate with an accountant.

Requirements

  • Be a small business owner or aspiring small business owner.

Description

A common cause of failure among startups is the business owner running out of cash before
the business has time to become successful. The interplay between the financial conditions of a
business and the financial situation of the owner is something that many entrepreneurs fail to
plan for when they launch a new business. This course explains how the finances of the
business and its owner are intertwined, including cash flow and debt. We also explore ways in
which an entrepreneur can more effectively manage the personal side of this financial equation
to ensure that their business has the best chance for survival from startup through its maturity.
Finally, we look at the paths entrepreneurs have available to build personal wealth.

Who this course is for:

  • Anyone with a small business of the dreams of owning a business one day.
  • Anyone wanting to understand how their personal finances play into their business' finances.

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