No entrepreneur is created equal, but many share the same character traits. Entrepreneurs are often tenacious and bold, they are able to tolerate risk in ways most people cannot. They are curious but disciplined dreamers; and great entrepreneurs know when to move full speed ahead towards a goal, and when to shift gears when something just isn’t working. However, there is one very important trait that is often overlooked when we talk about successful entrepreneurs: financial literacy.
Many entrepreneurs live in their imagination; they constantly come up with different possibilities where none exist and strive to make things just a little bit better. What entrepreneurs are not always thinking about, however, are the financial realities of interest and the time value of money. Yet these are essential things to consider when starting your own firm or small business.
To turn their intangible dreams into realities, entrepreneurs often need to learn the basics of running a business and managing cash flow. They need to learn all aspects of financial planning from forecasting how much their small business will cost in the beginning, to understanding how much they will need to put aside for any unplanned costs.
The same planning entrepreneurs put into building the financial foundation of their small businesses, is the same type of thinking that should be applied to other aspects of their financial lives like in crafting a retirement strategy, for example.
