You’re watching TV, out with friends, reading a good book, or simply just sitting at the kitchen table eating breakfast, when BAM, the “A-HA” moment hits you!

You believe you have come up with the next, best, greatest________ (you fill in the blank). We have all been there, your mind starts racing and you are envisioning thoughts of grandeur. You fast forward through all the business stages…you may even envision yourself pitching this great idea on Shark Tank where all the sharks are fighting over who will invest in your business, ending with you riding off into the sunset with all your riches and Mark Cuban.

This sounds amazing right? Well, kind of. Have you even asked yourself if you have the “know how” to start/run a business? Have you even set yourself up to the POSSIBILITY of starting a successful business sometime in the future? Sorry to be the dream killer here, but it is a known fact that if you don’t set up your business with the proper foundation, there’s a high probability that it can fail no matter how perfect, innovative, or clear the business idea is.

To put it in perspective, would you even say you have a grip on your current financial situation? Are your debt levels low? Are you saving money every month? Do you own any other investments? If you can’t confidently answer these questions, how can you start a business?

Any good business idea needs time.

You should let it marinate over time, days/months/even years, while you get yourself in the strongest possible financial situation. So, if and when you are ready to take the idea and run with it, converting it into an actual business, you are not financially ruined.

Remember, sometimes these ideas take longer than expected to run a positive cash flow, making an even stronger case, that you put yourself in the strongest financial situation possible.

How do you do this? I’m glad you asked!

The financial planning process encompasses many things, not all of which will necessarily apply to you today. Things like:

cash flow management
investment management,
risk management
tax planning…

…all make up a sound financial plan. These are areas of your personal financial situation that have to be developed and monitored throughout your entire life.

While developing this plan, your main focus should be on cash flow.

The infancy stage should begin with trying to generate free cash or surplus income. The more “EXTRA” money you have at the end of the month, the higher the potential your business has to be successful tomorrow. You need to learn to live on less, as soon as possible. Bye-bye Starbucks, hello archaic coffee pot and reusable travel mug. All of these sacrifices will benefit you and your business in the long run. The earlier you start treating your current financial situation like your future business, the better off you will be.

So today, you need to get a handle on your cash flow.

Know what’s coming in and going out, get in the habit of tracking every dollar.

It is not realistic to think you should freeze all spending completely, but more important that you understand HOW you are spending your money. So when the time comes to get your business off the ground, you will know, in what areas you are spending and what areas need reigning in. If you have no idea how your money is being spent, how do you do know what to reduce without blowing up your whole world?

To build on top of tracking your cash flow, it is also important to scoop up that extra cash and SAVE IT.

In the perfect world, it’s recommended to have 6 months to 1 year of expenses in the bank before taking on any major financial risk, like starting a business.

This is preventative measure that will give you staying power if your business takes a while to generate profits. Do not expect to siphon any income from your business in the beginning. That is not realistic or prudent. So how do you plan to live? Pay the rent? Put food on the table? The answer: Money you saved in the bank!

You should also start establishing a credit history.

Apply for a credit card and use it. Make sure to pay it off each month, but get in the habit of borrowing and paying back. If you feel this is like playing with fire, i.e., you can’t control your spending; maybe starting a business isn’t the right path for you. To be a successful business owner you need self control! A business might need some loans in the beginning and the CEO might have to personally guarantee those loans, having a credit history might just be the lifeline you need.

Lastly, you should start thinking past tomorrow, even past the next 5 years.

Starting a business is a great goal, but it cannot be the ultimate goal. It should be viewed as the tool to help you get to something else, something bigger. Maybe its financial freedom, maybe it’s the ability to take care of your family, no matter the reason, it is personal to you and you should use that to help keep your eyes on the prize. Start thinking about it, heck, even go one step further and actually start writing out an action plan. The earlier you start building the blueprint of what you want your life to become, the earlier you can start plugging in the necessary pieces to help you get to the finished product.

Starting a business can be very rewarding but also frustrating and stressful. Taking the correct steps towards building a business with a strong foundation is paramount to see the highest levels of success. In the words of one of my favorite people, Benjamin Franklin, “If you fail to plan, you are planning to fail” could not be truer in the world of successful financial planning and business building. Stay focused, organized, positive, and start to plan the building blocks to your financial success!

Starting A Business In The Future

The Next Big Thing!