Separating your Business From Your Personal Life & Assets
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total Video & Workbook time
Smart business owners are always looking for help, advice and answers. That’s natural. But WHO you listen to can make a critical difference to your business. In addition, the structure of your business, with respect to your personal financial affairs, matters a lot too. These important considerations, are often overlooked, until it’s too late. Learn where to get good advice, and how to protect your personal life, privacy and assets.
Everybody needs advice, for no man is an island, as the quote goes. Where you get your advice from, however, can have a great impact on your business.
Also, keep in mind that advice offered for free, has as much value as the word. Free = $0. The other aspect of free advice, is that it carries no liability, on the advice giver. If the advice works out, they get the credit. If it fails, they’ll say… “well, I’m no expert, I just told you what I thought”.
Would you take legal advice from someone who isn’t a lawyer? Or electrical repair advice from someone who’s not an electrician? I could go on, but you get the picture.
Credible, expert advice usually costs money, and comes in the form of reports, market studies, consulting. Like when you buy a franchise. You’re paying for proven knowledge.
Completing this module will help you:
Tips & notes
The most valuable advice is, topically, expert advice. Legal, accounting, engineering, etc.. Ultimately, you should never seek “operating” advice.
For example: Should I hire another person? Should I lease this piece of equipment? Should I add more services?
You should only look for information, and input on specific issues you’re considering, when making an operating decision.
When you look for operating “advice”, you’re simply handing over the key decisions, to someone else. You then, no longer control your destiny or your company. Nobody can, or should, make any operating decisions unless you hired them to help run your company.
We typically seek advice from well meaning friends, family, and even employees – because we trust them. That doesn’t mean they know anything, directly, about all the hidden issues or the complexities you’re facing.
We also get offers of advice from “wiser advisors”. People who we know and trust – but they think they can help you because they have some insight.
For example; A donut shop owner cannot give business advice to a plumber, since they’re distinctly different businesses. Unless the donut shop owner owns a dozen different kinds of businesses, they’re probably in the same boat as you. Looking for answers.
The other consideration is that YOU own the business, and ultimately 100% of the responsibility for decisions, rests on you. You benefit – or take a loss – for every decision. Not the advice giver.
You’ll learn that YOU are the source of your best advice, as long as you know the lay of the land, have “read the tea leaves” and have assessed your situation properly.
In short, don’t look for “advice”. Look for “information” that helps you make informed decisions.
Video 28 Min + 12 Min read to complete worksheet
There are many forms of business, but not all forms are equally suited to your business type, or to your personal financial situation.
How you set up and manage your business day to day may not have an impact on your personal financial situation. But if something goes sideways, you may find some unpleasant surprises. Or, if your personal situation changes, which then impacts your business structure.
Video 46 Min + 20 Min read to complete worksheet
Perhaps you’re thinking that at some point, you’re going to expand to other locations, or even to another city.
Think of your new location as a from the ground-up startup. You’ll need to find office or warehouse space, find employees, invest in equipment, assess the market (hopefully you’ve already done that!) and try to “break into the market” by getting customers.
You’re starting a new business and leveraging your existing business and resources. That’s a big risk, and if well planned and executed, a logical progression for any business.
However, there are steps you can take to protect your existing business, because if the second, or third location doesn’t work out – it could spell financial disaster across the board. Even personally.
Video 52 Min + 25 Min read to complete worksheet,
You may think of your business as it being “your” business. But the business is technically its own entity, like its “own person”. It enters into contracts, hires people and performs services.
You may make the decisions and sign all the documents, but you and the company are distinctly separate.
Think of yourself as an employee – which is what you are because you collect a paycheck.
Always keep in mind that if the “business” as an entity, runs into trouble, how that will spill over into your life as the “employee” who happens to run the business.
Video 47 Min + 22 Min read to complete worksheet
This is not the same as the above lesson. There are some companies where the owner set up the business with a clear focus on their own personal reputation and “brand”.
For Example: “John Anderson Contractors”. John is the “face” of the company. He is always out front and meets the clients for all the projects. It could even be a substantial company with dozens of employees.
Everybody knows John. They trust John. They rely on John. They call John when there’s a problem.
They hired this contractor because of… “John”.
So what happens when John wants to retire, becomes ill, or even dies? The company will likely quickly dissolve and it really can’t be sold. Because John is no longer there, and it was all about John. It was personal. John WAS the company.
Don’t make yourself the face of the company. Sure, play a role, but make sure you make yourself dispensable. NOT indispensable, or you’ll never get away from “your company” – or sell it for anything more than the assets, since your client base will have no value if it was all about you.
Video 52 Min + 18 Min read to complete worksheet