On Solid Ground

STEPS TO ACHIEVING FINANCIAL SECURITY

- Maggie Potter

What do you think of when you think of financial security? For many people, it’s a number: “I’ll be secure when my business reaches $100,000 in sales. I’ll be secure when we reach our first million.” The truth is that financial security isn’t necessarily a number: It’s more about planning than selling.

You don’t need to be wildly successful to be financially secure. Instead, you need to be ready. To do that, you must have a clear view of your current financial position and what potential emergencies and opportunities could appear. Then, you need a plan to protect yourself.

Achieving financial security is more about organization and diligence than about securing new clients or increasing your sales. Here’s how you can become financially secure without doubling your business.

PLAN FOR ALL EVENTUALITIES (INCLUDING OPPORTUNITIES)

Keeping an emergency fund is critical for personal finance. You know that you need at least six months’ worth of money to pay your mortgage, bills, and incidentals in the event something disastrous happens and you lose is true for your business. No matter what business you’re in or how razor-thin your profit margin is, you need an emergency fund.

An emergency fund doesn’t just cover big, unpredictable problems. It can also help mitigate cash flow problems or even allow you to take advantage of a big opportunity that comes up at the last minute.