Can you run your business properly if you ignore your personal finance? Not possible. Irrespective of whether you run your business on your own or as a partnership, not being strong in your personal finances will put you in a very difficult position. For starters, you would not be in a position to explore different options because of lack of money.
If you have a war chest of $100,000 in your hand, you can easily expand your business and take advantage of short and long term options without any hesitation. This is because you will have a huge sum to fall back on if something goes wrong. It is not necessary to have the entire amount in hand as liquid cash.
If you have invested in shares, life insurance and various other investments, you can be secure if things go wrong. The point here is that being strong in your personal financial condition will enable you to take calculated risks without any hesitation.
Further, having a strong personal financial base will give you complete peace of mind. If you are worried about arranging the next of meal for your family, it is obviously going to have a negative impact on your business. Only those who have faced these problems can attest to the extent to which these issues cloud judgment.
People adopt a play it safe approach and try to secure minimum profits rather than maximum income. Over a period of time, this negative approach becomes so common that people simply forget what it means to take aggressive and calculated risks in business.
Hence, make sure that you do not follow separate rules for business finance and personal finance. Rather, you should make sure that you are comfortable and secure in both aspects so that you can do business without any hesitation or fear of failure.