Most entrepreneurs look at their venture as a child and this is especially true for women entrepreneurs/ intrapreneurs. The challenges of building a business require the patience, prudence and foresight exhibited intuitively by many successful women worldwide.

The journey of a thousand miles requires a plan both for personal finances and business finances. It needs to be divided into the idea stage and the maturing of the venture in the growth phase.

Idea or pilot stage

In the idea stage there is no difference practically between business and personal finances. This is so as there are no personal savings from the business in this phase. For the pilot phase, one of our clients had a savings for 12 months which held her in good stead.

A model portfolio would look like:

• 80% Fixed Deposit/ Liquid funds
• 20% Equity/ Equity-oriented funds
  
  

Why a higher allocation for Liquid funds?
This is a phase where ideas need cash flows and commitment at a personal level.

What if I am an intrapreneur?
There is a benefit of having a salary, therefore allocations to more equity-oriented opportunities can be thought of. Also it depends on your family situation. If you have children, you may be inclined to save more.

Once you start saving, you could consider debt funds and then think of other categories as you evolve as an investor.

Growth and maturity phase

Growth phase is exciting; however, the catch is managing cash flow. There are many stakeholders like employees, external consultants and the government. It creates its own requirements and the old adage ‘it takes a village to raise a child’ holds good. It requires a deft handling of taxes, personal aspirations and financial discipline to cross this chasm.

How will it be achieved?

• Pay yourself first

It starts by giving yourself a salary. It is a prerequisite for any entrepreneur serious about creating a strong financial foundation. The reason being, if you cannot pay yourself a reasonable salary or equivalent thereof now, how will you achieve your personal goals?

• Align values with wealth

People with wealth and means are often unhappy or suffer from self-inflicted pains if their values are not aligned with the amount of money they possess. Ask yourself, is this decision likely to bring happiness and goodwill to all stakeholders?

This is relevant as this gives peace of mind as well as the benefit of health.

One more form can be donating a certain percentage of your salary to your favorite charity or causes close to your heart in your vicinity. It can boost your self-worth as you make the world a better place.

• Be a learning machine

Learning multiple disciplines is critical if we are to stay in the game. This also helps to identify opportunities which are there within the operation or within the ecosystem. The best business leaders are ‘books with legs’.

• Understand compounding

Many of us who are from a non-finance background don’t understand compounding as we are likely to remove the money before we see the fruits of our vision. This short-term thinking is dominant as we are wired to align with our system of now and here in a consumerist world. If you are able to see this over a 5 year period with 24 month savings via investments or trading opportunities you are likely to grow the concept to a belief.

Carpe diem!

Also read: Secrets about financial freedom that can change your life

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