Aligning Personal and Business Money Goals: A Practical Approach for Rural Business Owners

In today’s blog, we’ll explore practical strategies for aligning your personal and business money goals—an essential step for rural business owners who often face the challenge of blurred lines between personal and business finances. As someone who works closely with rural businesses, I understand how crucial it is to gain clarity and create a financial roadmap that supports both your personal and professional aspirations.

Defining Your Personal Money Goals

The foundation of financial planning begins with a clear understanding of your personal financial needs. Start by categorising your expenses into two groups: essential expenses and discretionary expenses. The essential, or ‘must-have,’ expenses are your non-negotiables—those costs you need to cover to maintain your lifestyle. These might include:

• Groceries and household bills
• School fees or childcare
• Mortgage or rent payments

Next, consider your ‘nice-to-haves’—the expenses you would prioritise if budget weren’t a constraint. This could be anything from holidays to home improvements or even long-term savings goals. By assigning a dollar amount to each item, you will create a clear picture of what you need to cover both your essential and aspirational expenses.

Setting Your Business Money Goals

Once you’ve established your personal financial goals, it’s time to turn your attention to your business. Start by identifying the ‘must-have’ expenses for your business. These are essential costs that keep the business running, such as wages, marketing, and operational expenses. Review your profit and loss statement and cashflow report to ensure you have a complete understanding of these costs.

In addition to these essentials, consider the goals you have for growing or improving your business. This might include expanding your team, increasing your marketing budget, or investing in new equipment. Assign a dollar value to these goals as well. By combining the ‘must-haves’ and ‘nice-to-haves’ for both your personal and business finances, you will arrive at a total income goal for your business.

Identifying the Gap

The next step is to assess the gap between your current financial position and the income needed to achieve your goals. This gap is often where many business owners become stuck, but it is critical to acknowledge it in order to make informed decisions. By understanding where you are now compared to where you need to be, you can start developing a strategy to bridge that gap.

Bridging the Gap: Developing a Strategy

Once you have identified the gap, it’s time to focus on how you can meet or exceed your income goals. This could mean increasing the revenue from your existing products or services, or it may involve introducing new offerings. For example, if you’re in the agricultural sector, you may consider exploring new markets for your livestock or diversifying into other enterprises..

It’s also worth evaluating your pricing strategy. Could increasing your prices bring you closer to your goals? In some cases, improving your marketing efforts or expanding your customer base might be the key to achieving your desired financial outcomes. The goal is to think creatively and consider all the options available to you.

Structuring Personal Payments

One of the most common issues we see among small business owners is the lack of structure around paying themselves. Many simply withdraw money from the business as needed, but this can create inconsistency and make it harder to achieve personal financial goals. A more structured approach is to determine how much you need for personal expenses, based on your previously set personal money goals, and pay yourself a regular salary accordingly.

For instance, if your personal financial goal requires $100,000 per year, divide that into monthly or fortnightly payments. This structured approach ensures that your personal financial needs are consistently met and encourages better financial management on the business side to support these payments.

Summary

Aligning your personal and business financial goals is a powerful step towards creating a sustainable, profitable business that supports your lifestyle. While this process may feel overwhelming, it’s essential to take the time to list out your goals, analyse the numbers, and create a clear strategy. By bridging the gap between where you are and where you want to be, you can ensure your business is working effectively to meet both personal and professional goals.

Thank you for reading, and we encourage you to stay connected by subscribing to the Rural Money Matters Podcast or following us on socials @ejsbusinessservices for more insights and practical advice.

If you found this content helpful, please feel free to reach out and let us know! We look forward to supporting you on your financial journey!