Creating a Personal Financial Statement for Business Owners: 12 Things to Know

Creating a Personal Financial Statement for Business Owners: 12 Things to Know

What is one thing business owners should know when creating a personal financial statement?

To help business owners create personal financial statements, we asked finance experts and business owners this question for their best insights. From writing off everything to making sure you’re in good financial health, there are several things business owners should consider when creating a personal financial statement.

Here are 12 things to know about personal financial statements:

  • Write Off Everything
  • Separate Personal and Business Items
  • Get Help
  • Include All Assets and Liabilities
  • Have Contingency Plans Ready to Prepare for the Worst
  • Work With a Financial Planner
  • Triple Check the Numbers
  • Always Create Financial Projections
  • Understand What Assets Will Help Increase Cash Flow
  • Consider Volatility
  • Get Feedback
  • Make Sure You’re In Good Financial Health


Write Off Everything

Make sure that you are able to write off almost everything when it comes to the business. It saves your company a lot of money overall and it helps create a better personal balance sheet. As the owner, you can write off your gas, car payments, phone bills, lease/rent, and more. Tax write-offs are one of the best tips when creating a personal financial statement.

Michael Jankie, Natural Patch


Separate Personal and Business Items

Business owners should be aware of the difference between their personal and business finances. The personal financial statement should only include assets and liabilities that are related to the individual, not the business.

Matthew Ramirez, Paraphrase


Get Help

It’s helpful to seek out assistance from an experienced business attorney. This will help you prevent any mistakes. It will also help ensure that you include the financial statement and the other necessary components. These include listing your assets, your net worth, and your liabilities. The financial statement comes in handy when it comes to trying to secure a loan or attract outside investors.

Sarah Pirrie, Healist Naturals


Include All Assets and Liabilities

When creating a personal financial statement, business owners should remember to include all assets and liabilities. They should also be aware of the different formulas used to calculate their net worth and cash flow.

Claire Westbrook, LSAT Prep Hero


Have Contingency Plans Ready to Prepare for the Worst

When it comes to running a business, especially at the start of your venture, you will want to make sure that you have cash set aside in an emergency fund for when things go wrong that are unexpected. Typically, it is best to have at least three to six months of cash set aside so that those finances are ready to be used if necessary. If you do not have that amount of cash ready to save, look into your lines of credit & make sure that you have an equivalent amount of credit ready. By preparing your business for financial emergencies, you as an owner show great organizational skills & are setting yourself up for success.

Sacha Ferrandi, Source Capital


Work With a Financial Planner

There are several basic financial reports that business owners should be privy of when managing daily business operations, one of which is a personal financial statement that plays a key role in your business’s success. Although your personal financial statement should not include your business assets and liabilities, it does detail your personal finances as an entrepreneur and plays an integral role in determining your eligibility for applying for business loans at any stage of its life. To ensure your financial statements are on the right track, work with your lender or financial planner to ensure completeness and accuracy.

Brett Estep, Insured Nomads


Triple Check the Numbers

Oftentimes when creating financial statements, individuals will choose to use a tool that aggregates all the data into a sheet ready to share. Despite the checks and balances done by these tools, there is always room for mistakes. This being said, it is vital to carefully check over the numbers to ensure you are presenting an accurate picture of yourself or your business.

Lauren Murdock, Mainvest


Always Create Financial Projections

Monthly or yearly projections are vital for better planning of income reserves and business supremacy. When creating a personal financial statement, business owners should calculate their anticipated income based on set projections for sales and expenditures like labor, supplies, and overhead costs. The plan should include a sales forecast for the next three to four years, a budget for business expenses and overhead, and projected net profits over time.

Jonathan Tian, Mobitrix


Understand What Assets Will Help Increase Cash Flow

When creating a personal financial statement, it’s a good idea to know what assets can help increase cash flow and savings. Some of these include making investments in stocks and bonds or buying income-generating property. However, you should always be careful when it comes to investing because if you make the wrong decisions, your assets will end up costing you more than what they’re worth. Additionally, don’t spend money on property s that won’t generate income. If an asset doesn’t produce a steady income, it’s probably not a good investment for you.

Marc De Diego Ferrer, MCA Assessors


Consider Volatility

More and more business owners have holdings that are strongly subject to the economic winds.  Whether it’s real estate, stocks, or even highly volatile assets like cryptocurrency, the impact outside forces can have on your finances is real. Consider both the depreciation and volatility of your assets, even if your lenders don’t.

Nate Tsang, WallStreetZen


Get Feedback

A personal financial statement doesn’t need to be totally private. Be sure to contact a trusted financial professional and ask them for their feedback. Let them be frank with you—better to have a stellar personal financial statement than something wholly original that you end up changing later out of necessity.

Jeffrey Gabriel,


Make Sure You’re In Good Financial Health

For many first-time business owners, your personal financial statement will act as a personal guarantee when looking to receive financing for your business. As a result, you have to be as honest as possible about your own financial health and net worth. If your personal finances are not yet in order, consider waiting until after you have better financial health before seeking additional financing. This will help you get better rates and terms for your business loan, in turn giving your business a better chance at success.

Riley Adams, CPA, Young and the Invested



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