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How Rising Interest Rates Could Impact Your Finances

How Rising Interest Rates Could Impact Your Finances

As expected, the Federal Reserve is holding firm to its policy of hiking short-term rates in an effort to cool inflationary pressures. Generally, these small, incremental rate increases don’t immediately impact consumers. The fed rate is the rate the Treasury charges banks for the use of money overnight. When the Fed raises its short-term rate, the banks will increase the rate they charge borrowers, so consumers may experience a slight uptick in borrowing costs.


The more significant impact on consumers comes from an increase in long-term rates (Treasury bonds), which have also seen an uptick this year, impacting mortgage rates, variable loan rates, credit card interest, savings account rates, and certificates of deposits.


Here are the ways higher interest rates can impact your finances and some steps to take to mitigate their effect.



Higher Mortgage Rates


After hovering near historic lows for several years, mortgage rates jumped past 5% for the first time in more than a decade. With Treasury bond yields expected to inch higher, mortgage rates won’t be far behind.


Rising interest rates won’t impact you if you currently hold a fixed-rate mortgage. However, if you have plans to refinance your loan, now would be the time to do it because there’s no predicting how high rates could climb.


If you hold an adjustable-rate mortgage, your interest costs will increase, so now may be your best opportunity to lock in a reasonable, fixed rate.


Higher Consumer Debt Costs


Credit cards and other types of consumer loans also carry variable rates, which can be expected to increase with rising interest rates. Keep in mind, variable rates on consumer loans tend to adjust once per year, while credit card rates can change at any time.


Your best bet is often to pay down high interest, variable debt as quickly as possible to avoid swift changes to your payment. Some lenders offer personal loans with fixed rates for loan consolidation as an option to explore. You could also look for 0% balance transfer opportunities, though that would only be a temporary solution.


Good News for Savings Deposits


Savings accounts are already seeing yield increases. However, unlike rates on consumer debt, which lenders are quick to raise when interest rates rise, rate hikes on savings accounts tend to be smaller and less significant. Still, accounts that were recently yielding as low as 0.025% have jumped to as high as 1.0%. While it’s still relatively low, it’s an improvement. If interest rates continue to increase, you can expect yields on your savings to follow suit.


The Impact of Rising Rates on Investments




Rising interest rates affect different types of investments in different ways. For example, bonds are almost always negatively impacted by rising interest rates. That’s because rising rates force bond yields up, which decrease bond prices. However, if you hold a bond to maturity, you will receive the entire value when you redeem it. If you sell bonds in this environment, you will likely receive less than their par value. General rule of thumb: When interest rates decrease, bond prices should increase again.




The impact of rising interest rates on stocks can vary depending on the industry or market sector. Stocks of companies with a lot of debt don’t perform as well because they will have higher borrowing costs. Because interest rates are increasing as a result of higher inflation, the bottom line of some companies suffers because of the higher cost of producing or selling goods and services. However, well-established, well-managed companies with big brands, dominant market positions, and low or no debt can perform well in a high-interest and inflationary environment.


Diversification is Key


As always, the key to successful investing in any interest rate environment is to ensure you are well-diversified with a mix of different asset classes. Because it’s difficult to know which asset class will outperform another at any given time, owning assets with low correlation to one another helps to minimize volatility. For example, historically, stocks and bonds have a low correlation, so it is good to have a mixture of both in your portfolio.


Time to Reassess Your Personal Finances


Although many people have never experienced it, rising interest rates are a normal part of the economic cycle. For more than three decades, borrowers have benefited from declining rates (not so much for savers). Now the cycle is turning to where savers will benefit over borrowers.


Keep in mind that economic cycles can last for years or even decades, so it is essential to maintain some flexibility so that you can make adjustments to your finances that can mitigate adverse effects while capitalizing on positive ones.


At Platt Wealth Management, we understand that the rising rate environment is new for many younger investors and may bring up some (not so fond) memories for our older ones. But, rising rates aren’t all bad and simply need to be accounted for in your financial planning.


As always, we are here to answer any questions or address any concerns you might have about this rising rate environment. Our goal is to support you through these ebbs and flows in the economic cycle so you stay honed in on what is most important to you on your financial journey. 




Are you on track for retirement?


Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Protect Your Inheritance. Enhance Your Life.

Protect Your Inheritance. Enhance Your Life.

Whether it is expected or unforeseen, receiving an inheritance can be life-changing. Regrettably, it’s not always in a good way. That’s because the reality is that many folks struggle to preserve what they’ve inherited in such a way that enhances their life over both the near and long term.


In fact, the track record for Americans is pretty abysmal. Only two-thirds manage to increase their wealth after receiving an inheritance, and nearly 90% of families manage to waste it entirely when it passes to the next generation. 


Much of this can be attributed to two factors: (1) the heirs’ unwillingness or inability to act responsibly and/or (2) a lack of true understanding about what it means to be a steward of the family’s legacy. The latter tends to happen when family members lack a shared vision and purpose for their legacies. But almost always, it really comes down to poor decision-making and money mismanagement. 


Inheriting money should be a blessing, not a curse. But it takes the right perspective and the willingness to manage it with a clear purpose to get right. An inheritance that is honored and preserved provides the potential to change you and your family’s financial trajectory (and that of your heirs, as well). 


With this in mind, we’ve compiled a list of five things you can do to protect your inheritance and enhance your life so your family’s legacy is put to purposeful use.



1) Take a Step Back. Pause. Reflect.


There’s no rush in deciding what to do with your inheritance. It will be perfectly safe sitting in a zero-risk money market account while you take the time to evaluate your next steps thoroughly. While you might be tempted to make some moves right away, we encourage you to wait until you’ve consulted with your advisory team before you start dispersing the funds.


Primarily, this is because major money moves should never be made in isolation, but in the context of your overall financial picture. You need to see how the implications of your decisions could or will affect the other financial areas of your life. There may be better options for the allocation of your funds you aren’t aware of, or tax implications for your decisions that could come back and cost you. Making strategic decisions will be imperative in preserving and maximizing what you’ve inherited.



2) Build Your Dream Advisory Team.


Managing personal finances can be complex, and receiving a large sum all at once can magnify the complexities and implications of your decisions, especially regarding taxes and the estate.


Not only will you need an investment strategy based on your family’s goals, priorities, and risk profile., you’ll also need to consider the increased risk exposure you could have and how to protect against it. All of these considerations, and more, need to be integrated into a comprehensive financial plan that will optimize the value of your legacy. 


To build your dream financial advisory team, you’ll need to enlist the help of the following professionals: a financial advisor, a tax professional (preferably a CPA), and an estate attorney. Your financial advisor, or team of advisors, can then guide the other members of the team to make the planning and tax decisions that are best for you and your circumstances.



3) Clearly Define Your Life Ambitions.


Getting clear on what you’d like your life to look life is critical before you start spending. Plus, this is the fun part. You get to dream big and decide how you’ll align your resources with what matters to you most. Maybe it’s retiring early, fully funding your children’s’ college funds, or even investing in real estate. Have you always wanted to start a business? Travel more often. Buy a vacation home. Perhaps be able to work remotely doing something you’re passionate about. The way to get there is with the right planning performed up front.


Plus, we have found that the people with no clear vision or purpose for how they want to use their money tend to waste it on the “pursuit of more,” which ultimately brings no lasting fulfillment and leads to a lot of personal and financial disappointment. But people who set clearly defined goals that align with the purpose they see in their life are able to make smarter decisions about their money. They have clarity and conviction about how they want things to turn out, and put the plans in place to get them there.


At the end of the day, clarity on your big picture helps to streamline your financial plans and investment decisions. Any decision, strategy, or investment option that doesn’t get you closer to your goal should be eliminated.  



4) Addressing Immediate Priorities.


We know you are likely anxious to cross some financial to-dos off your list. Depending on your circumstances, there may be some things you can do right now to enhance your financial position while checking off some financial planning boxes. Remember, any financial decision you make should be made in consultation with your advisory team based on your long-term goals. So, if you are unsure, always err on the side of caution and wait until you have sought the appropriate counsel.


  • Pay off Smaller, High-Interest Debts


If you have the capacity to pay off smaller, high-interest consumer debts that will improve your cash flow, it may make sense to handle these sooner rather than later. Student loans would be the next in line of priorities, but depending on the amount, you may want to consult with your financial advisor before selling equity positions to reconcile these debts. You need to weigh the relative merits of your desired outcome with the realities of the decision to see what makes the most sense for your long-term financial security.


  • Bolster Your Emergency Fund


Increase your emergency fund to make sure it can be used for unexpected expenses, such as major medical bills, home or car repairs, or to cover living expenses for up to six months if you lose your income to a job loss or disability. 


5) Bigger Picture Goals to Consider


  • Funding Your Children’s College Education


If the funds are available, this would be an essential box to check off your financial plan. It can be far less expensive to pre-fund your children’s education while they’re young, and if you can do it with a lump sum investment, you can set it and forget it. Your financial planner can help you determine how much to invest now to cover educational expenses and the best vehicle to use. 


  • Funding Your Retirement


Depending on how large your inheritance is, if you have enough to pre-fund your retirement, it would be another critical box to check. Allocating a portion of your assets to secure your retirement will give you the confidence to freely allocate your other assets to pursue other goals. Again, your financial planner can help you calculate your income needs in retirement and guide you in developing an appropriate investment strategy. 



6) Honor the Legacy 


To honor the legacy bequeathed to you, you must become its steward, ensuring that it will benefit both you and future generations. Your success in accomplishing that will rely primarily on the decisions you make and how well you prepare the next generation for their eventual job as stewards after your passing.


Work with your estate attorney to develop a plan designed to preserve your estate and maximize it for your heirs. Include your children in any discussions having to do with your family’s vision and purpose for the legacy, as well as the values and attitudes about money you want to instill in your children. 

Most people who bequeath a large sum of money want to know that it will benefit future generations. After all, that’s what leaving a legacy is all about.


Creating Your Financial Strategy

At Platt Wealth Management, we know that life is about so much more than accumulated wealth and that real, impactful financial planning starts with what you want most out of life. That’s why our mission is to provide the financial expertise our clients need to think through and achieve the dreams they never thought possible. If this sounds like the financial advisory relationship you’re looking for, we encourage you to reach out and schedule your complimentary appointment with our team today. Or you can call the office directly @ 619-255-9554. We look forward to meeting you.






Are you on track for retirement?


Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

The True Cost of Scaling Your Business

The True Cost of Scaling Your Business

Growth is essential for a business. Not only is it a critical measure of success, but it’s also vital to a business’s survival. Businesses that are not constantly striving for growth risk being overrun by competition or becoming irrelevant in the face of changing trends. However, without a well-conceived strategy and proper preparation, trying to achieve growth at any cost can also be fatal. Know the true cost of scaling your business to succeed where others struggle.


Cash Flow is Key to Business Growth


The biggest mistake many business owners make is developing the mindset that growth will solve all their cash flow problems. While it’s true that growth has the potential to bring in more revenue, cash flow problems truly stem more from budgeting and forecasting issues than revenue issues. Achieving sustained growth requires a lot of resources. To achieve it, a business must be able to sustain some losses along the way, and cash flow must be able to keep up.


Business owners serious about getting to the next level must understand the importance of cash flow. It’s not enough to simply have more cash coming in than going out. Effective cash flow management is about building financial stability as a foundation for growth. Cash flow management becomes critical when a business reaches a turning point or transition stage. Having a firm grasp of available cash while being able to forecast future cash flows during growth periods is critical, as is having a solid grasp of upcoming spending needs. 


For example, a business owner invests money into developing an app believing it will help scale the business. It will take time to develop it, during which the business will be spending money on development costs before it can expect an increase in revenues. Even then, revenue doesn’t necessarily equal cash flow which doesn’t materialize until expenses are paid. In the meantime, the business has to meet payroll and other operational costs. A cash flow forecast must account for the lag between product development and revenue that eventually translates to cash flow. 


Practice Sound Cash Management 


Poor cash management is a primary reason why many businesses struggle to get to the next level. It often comes down to having a process that effectively accelerates receivables while timing payables. Slow receivables or ill-timed payables can result in unexpected cash crunches. Businesses transitioning to a growth stage should work closely with their business bank to implement cash management tools that will more effectively manage cash flowing in and out of the business. 


Have Ready Sources of Capital


When a business enters its growth stage, the need for additional capital can often outpace profits, which is when it must turn to other sources of capital. This is a critical juncture when, for the business to expand and meet growing demand, it needs money it doesn’t have. The biggest mistake business owners make is waiting until they actually need the money before looking for it. The time to build relationships with a bank or investors is well before you enter your growth phase.


Set Realistic Expectations with a Business Plan


Having a clear vision of where your company is going is vital. However, a vision can turn into a pipe dream without a well-conceived business plan. A sound business plan articulates your vision, objectives, and the specific strategies for achieving them. Your plan becomes your rallying cry to get others on board, including your employees, investors, and lenders. It is also the critical benchmark against which your progress is measured. 


Ally with a Trusted Financial Professional


Nothing worth having comes easy, and this is certainly the case with business growth.

If you are a business owner who is serious about taking your business to the next level, cash flow planning, cash management, and a true inventory of your resources need to be top of mind.


Of course, this can be hard to see from inside the business, especially as the owner or operator emotionally and personally invested in the company’ future success. This is precisely why having an advisor who can help you sort through these realities can really help you get a clear picture of the true cost of scaling your business—what it will take financially, personally, and emotionally.


If you are a business owner in need of this type of relationship, we encourage you to reach out. At Platt Wealth Management, we seek to empower our clients by providing them with the personal and professional financial advice they need. We serve clients locally in the San Diego, CA area as well as throughout the country. To talk to an advisor, schedule your appointment here. 





Are you on track for retirement?


Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Networking for Success on LinkedIn

Networking for Success on LinkedIn

Working remotely and under stay-at-home orders means everyone is online. Being on the internet won’t go away once we’re able to gather in person, which will hopefully be soon! Networking online is critical during this time. The one social media platform dedicated to business and professionals networking is LinkedIn.


Why should you start networking on LinkedIn


For entrepreneurs, those in the C-suite, and management, the platform isn’t just finding clients. It is also an excellent way to connect with colleagues in your field to stay up-to-date on industry trends. This community also comes in handy if you leave your current position and want to transition to something new. 

When should you start networking? Just as it’s yesterday in person, so it is on LinkedIn. Don’t wait until you have a problem to start networking. Build your connections and contacts even if you have no intention of going anywhere or doing any content marketing.

Many employees looking for new jobs are on LinkedIn, and you might find the right talent there. You might have colleagues (or follow someone) who write thought-provoking articles that show up in your feed.

If you work in a highly regulated industry, your compliance department probably has some rules about how you can engage on social media channels. We’ll talk about general guidelines for LinkedIn in this post, but it’s good practice to run it through compliance first. Even if it’s not required.

Start with your page. If you have your own business, you can also create a business page. Executives, your company may already have a business page, and you can link it to your profile.


Understanding LinkedIn Networking basics


The platform is free, though you can upgrade to a paid subscription if you like. Management and C-Suite employees will probably get what they need from the free version discussed here. 

However, entrepreneurs who run B2B companies may prefer the upgraded version, known as Sales Navigator. The paid subscription makes it much easier to find target clients, and you’re able to message and connect with new people.

Your direct connections are called 1st-degree connections, people such as colleagues and friends. Introductions from your colleagues and friends become your 2nd-degree connections.

You can ask your 1st-degree connection for an introduction or ask the 2nd-degree contact if they would like to interact. Continue to extend your LinkedIn networking power to connect to 3rd-degree connections. LinkedIn doesn’t permit you to directly link to anyone you don’t have a 2nd or 3rd-degree connection.


Optimize Your Linked In Network Profile: Tell Your story


The more you build out your profile, the more visible you’ll be on the platform. The idea is to showcase yourself so people will be interested in getting to know you. Why are you a helpful or valuable connection?

  • Use your headshot instead of leaving the picture blank. You can also change the blue banner behind your head. Your company may have a suggested banner, or you can create one for your own business. When you develop your own, make sure it speaks to exactly what you do. And keep it simple.
  • The headline shouldn’t just be your title. “Manager” or “VP” doesn’t show off your skills. Instead, write what you do or specialize in specifically. 
  • Upload your resume to prepopulate things like the places you’ve worked and the schools you attended. Write up your Linked In descriptions to tell a story of your background and accomplishments. 

Make sure that you have all your certifications and awards in the proper spots. It’s not bragging when you earned it! Depending on your company, you may accept testimonials or endorsements to feature on your page.

Many business people make the mistake of rewriting their resume in the About section. Don’t do it. This is your opportunity to let people know more about you. What is it about your work that you genuinely enjoy? Think of it more as your mission statement in life and business. What kinds of subjects interest you? What do you like to do for fun?

It’s a great place to spotlight the problems you solve for your clients and how they feel after working with you. Especially for business owners. You can also add in why you chose this particular field. Keep your story at the bottom, so the “What’s In It For Me” for clients and prospects is front and center.


Using the LinkedIn Networking platform


As with other social media channels, the LinkedIn algorithm shows people you might know so that you can confirm connections. These can be eerily accurate or entirely off the mark. The more people you connect to, the better the algorithm gets. 

You don’t have to connect to everyone it suggests, but take a look at the person’s profile to decide if you want to reach out or not. Write a short note about why you’re connecting. Remember, it’s networking, so make the note about them, not you.

Once you’ve connected to someone, you’ll be able to see their network. If they are linked to someone you’d like to know. You can ask for a mutual introduction.

You’ll get a feed of the people you connect to and any organizations or groups you follow. You can follow well-known people in your field or a topic (such as “entrepreneurship”) to get those kinds of articles in your feed. It’s also algorithm-based, so who you engage with most shows up more often in your feed.

Interact with the postings, so people get to know you. You can also post articles and posts. Maybe you’ve written them, or else you think they would help the people in your networks.

LinkedIn also has groups, though the posting frequency tends to be much slower than on Facebook. You can join groups with your certification, in your industry, or with similar titles. Most business people can find groups where their clients appear and where referral sources or centers of interest go. 

Posting in these groups gets you in front of people that might not be on your feed. Connect with people who engage with you or whose posts you find engaging as well. (Note the focus on engaging, not selling.)

Although it’s business-oriented, it’s also social! Genuine interest responses, thought-provoking comments, or dialogue prompts work well.

Go forth on LinkedIn and prosper!

You can follow us on social media too! Platt Wealth Management is on FacebookLinkedIn, and Instagram. If you’d like to talk about your financial situation, please give us a call at 619.255.9554 or email us to set up an appointment.



Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Creative SALT Workarounds

Creative SALT Workarounds

One of the most hated tax provisions for people in higher-tax states is the so-called SALT limitation on state and local taxes. 



What is the SALT Limitation?


The provision was part of the Tax Cuts and Jobs Act, which only allows taxpayers who itemize their deductions to deduct a maximum of $10,000 on their federally taxed income for local property, sales, and income taxes paid to state and local governments. The limitation is especially punitive to joint tax filers because the $10,000 limit is the same for single and joint tax returns. 

If spouses file separately, each can only deduct $5,000 each of these local tax obligations.


Creative SALT Workarounds


Several states have proposed creative workarounds for this limitation. One possibly includes allowing state tax obligations to be paid as a charitable contribution, which would make them more likely to be deductible. The IRS publicly frowned on the charitable workaround. So, some states—Louisiana, Oklahoma, Rhode Island, Wisconsin, New Jersey, Maryland, and Connecticut—managed to find a different structure—and surprisingly, it looks like the IRS is going to go along.

The workaround only works for individual owners of pass-through businesses like a partnership or S corporation. The idea is that the company—not the individual taxpayer—could pay the SALT taxes. Then, they can take a deduction for these expenditures at the business level. The value of the deduction would pass through to the individual business owners.  


The Future of SALT Workarounds


Would that be legal? On November 9, the IRS released Notice 2020-75, which agreed that pass-through businesses could claim deductions at the business level for state and local income tax paid. There were state laws that would shift the tax burden from individual owners to the business entity. You can look for more states to follow the lead of the pioneering jurisdictions and for taxpayers to set up side businesses as a way to get all or part of this valuable deduction.

If you’d like to speak with a financial advisor, please give us a call at 619.255.9554 or email us to set up an appointment.


Key Financial Tips for Aspiring Entrepreneurs

Key Financial Tips for Aspiring Entrepreneurs

Many Americans retire from the office job that they held for several years and decide to go into business for themselves, becoming mid life entrepreneurs. Others don’t wait to retire but leave the corporate world to launch. Of course, some people never work for others but engage in entrepreneurship from the very beginning. 

The world of having your own business is quite different from the corporate environment. There are a few things to remember about business finance and personal finance when you leave your regular employer to hang out your shingle.

In honor of National Entrepreneur’s Day, we’re providing this checklist to assist new business owners. It’s an overview to help ensure that your finances stay on track even through the risky business of owning your own business.


Personal Finance


Don’t forget about retirement

Sometimes new entrepreneurs need to tap into their retirement accounts to get their idea off the ground. Or you may assume that you’ll eventually sell your business and fund your later years with the sale.

But the power of investing for retirement lies in the compounding of your annual returns. The longer your money has to grow, the less you need to save. If you get too close to retirement age without having saved enough, you’ll need to come up with a lot more money than if you had started earlier.

Fortunately, there are plenty of employer retirement plans available for business owners, whether you’re a solopreneur or you plan to gather a team. Start socking it away as soon as possible so you can allow the power of compounding to do its work for you.


Emergency fund

Your back up fund is especially helpful when you’re launching a business so that if anything goes wrong in your personal life, you have money to keep you going. No one wants to load up their credit cards unnecessarily. Give yourself some peace of mind by having this cushion in place before you launch.



If you have significant assets like a house or brokerage account, you’ll want to form a business entity for your company. That way, creditors can’t pierce the corporate veil to take your assets to pay off business liabilities. You need to follow the rules of whatever entity you choose to stand as a corporation against unexpected legal confrontations. As an entrepreneur you might take risk with your ideas and creativity, but not with your ownership.

Protecting your assets through a corporate structure is one form of insurance. Naturally, the other is actual insurance products from the relevant companies: umbrella, vehicle, homeowner’s, and life. You might also want to consider long-term care and disability insurance, depending on your situation.


Review for leakage and unnecessary expenses

Regularly sit down with your spouse (if you’re married) and review your expenses. Are you currently paying for subscriptions that you no longer use? Have costs crept up in any particular area? 

Your household should also review your investments regularly and make sure that you’re not spending extra on taxes or unnecessary fees.


Business Finance


The mindset that time is money

When you’re in a corporate job, it’s easy to spend whatever time you need to get the work done and not think about it too much. But when you’re running your own business, you need to account for the time the same way you account for money.

Every hour that you’re working should have a purpose and the same for your staff. You may only need a part-time assistant and not a full-time one, for example.

It would help if you had a reasonable estimate for what an hour of your time costs. That can help you decide where to prioritize your efforts. If your hour is worth $200, should you use it to work on a task that only costs $50? 

That also tells you which clients to go after with your marketing budget: only the ones that can afford your $200/hour services.


Measure the right numbers

When it comes to businesses, too many owners focus on vanity metrics such as revenue. Or base their marketing efforts on social media on “likes” or how many followers their account has.

The business should be making money for you at a certain point, which doesn’t necessarily happen in the first year. That means that you should think of your bottom line as the most critical metric. What profit is your company bringing in? 

What clients are your marketing efforts bringing in? Likes, follows, and the number of followers generally have nothing to do with your bottom line either. Engagement is the name of the game on social media, and visitors to your page or store are what counts in advertising.

If you’re not on top of what social media channels and metrics you should be following, be careful about whom you ask to help you. Make sure they understand that marketing is not about the superficial indicators but how many people are coming to your business to convert into customers.



Not all businesses require business insurance. It depends on the field you’re in and what you’re doing. For example, financial firms usually need at least E&O (errors and omissions) coverage. If you’re not sure, ask the people doing similar work what they have.

Or look at what your potential clients might require. If not everyone in your industry has E&O, for example, but the larger clients all need it, you should probably get coverage too. It is an added expense but may end up being well worth your while.

Launching a business is risky in itself, given that only about half of new businesses survive their 10th year. Give yourself a little peace of mind when you can.


Manage cash flow and expenses

As a business owner, you’ll soon learn that cash is vital. If you’re not invoicing clients quickly enough and not following up on accounts receivable, your life will be more unpleasant than it needs to be. These administrative tasks may not have been a focus for you in your corporate job, but it is incredibly important in your own firm’s early years.

Similarly, keep an eye on expenses. Starting, you should keep your fixed costs as low as possible. Don’t rent an office that you don’t need or hire staff before you need them or can afford to pay for them. 


Want to review your finances before you launch your business? Give us a call at 619.255.9554 or email us to set up an appointment.



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