How High Net Worth Entrepreneurs Protect Their Business and Personal Wealth
They say your health is your wealth and that proves to be very true but your wealth is your wealth also, and as a high-earning small business owner, you need to do everything you can to protect it. According to a recent report, it was revealed that small business owners have a lot of their business’ net worth connected to their business… In doing that, it’s detrimental that you take every necessary step to protect your business and your personal wealth but according to the report, there aren’t too many business owners taking those necessary steps to protect either.
As a small business owner, the very first step you can take in protecting your business is, at least, investing in business insurance for protection against potential business threats… this is especially important if you’re in the business of providing a service or giving advice. If so, you’re going to need a business insurance policy that protects against negligence as well as any other potential damages. Obtaining business insurance is the first and foremost part of protecting your business.
Just look at 24-year-old millionaire entrepreneur Abdelkader Bachr… He shares advice on how to become a top digital marketer, but do you think he’s sharing his knowledge without being protected by an air-tight business insurance policy? Absolutely not. You can best believe he’s done everything in his power to protect all of his wealth and assets.
There are, of course, other ways to protect your business and personal wealth but running a business is very tedious and time-consuming, which could mean that you simply forgot to call that lawyer back… you’re not intentionally neglecting your wealth but as you notice your business starting to quickly grow, that should be a huge sign for you to “up the ante” on making sure your business and personal wealth are protected.
Do you know how many small businesses have been victims of fraud? Millions. According to the FTC, over 1.4 million fraud reports were collected last year and in 2018, of all the small businesses that reported fraud, they lost $1.48 billion.
The fact that you’re a high-earning small business owner means that the last thing you need or want to be worrying about is fraud and how thieves can get you for all you’ve got… the only thing you need to be worrying about is how to make your vacation as luxurious as possible!
In knowing those stats, doesn’t that make you want to go back and take a more detailed glance at how well you’re protecting your business and personal wealth? If you need a few pointers on how to give yourself some peace of mind over the protection of your business and personal wealth, take a look at some of these actionable moves.
Establish Business Credit
For so long all you hear is how credit is bad and it just puts people in more and more debt… that may be partially true but even in that statement, it’s all about how you use credit. If you’re an irresponsible borrower, then yes, it will only drown you further and further into debt. But from a business perspective, credit can be one of the best things you can do for your business.
Because we’ve been told for so many years to “use cash if you have it” without realizing the beauty in credit. Not utilizing business credit cards and loans to grow your business are one of the biggest mistakes a small business owner can do, actually. And you don’t want to just use it in the beginning stages either… you want to use all throughout the growth and expansion of your business.
There are so many small business owners who are going into debt personally from using personal assets and being reliant on their own personal credit health to support their business. By establishing business credit, it’s going to safely separate your personal credit history from your business credit history, and that’s what’s going to keep your personal assets safe… you want to always keep personal and business transactions separate as much as possible.
Look at Outside Investment Opportunities
As a small business owner, your business is your baby (so to say) and you’ve invested a sizable amount of money into it and plan on continuing to invest in it… Well, that’s perfectly fine but have you ever considered investing outside of your business?
Think of it like this… if you told your financial advisor that you wanted to invest all of your assets into a single stock, they would highly advise you not to do that because you’d be putting your entire personal wealth at risk of being lost. By only investing in your business, you’re doing the same exact thing to your personal wealth as well.
To keep your personal wealth safe, you first want to get with a financial advisor to discuss the investment options you have and which ones would be a better fit for you. Things like stocks, real estate, and structured notes are all great investment opportunities. To take your protection even further, you can invest a sizable percentage into disability and life insurance to protect your family from any type of financial hardships in the event that you’re not able to work for an unplanned extended amount of time.
Ensure Financial Security With a Buy-Sell Agreement
This is the part of business that most business owners don’t want to think about. It’s actually one of the most important protection plans you can have for your business, your family, and yourself. In the event that you die or become permanently disabled, have you thought of who will run the business next and where the money will go?
You may not have thought that far ahead but a buy-sell agreement is something that’s better to go on and get set up while you’re able to do it. This type of agreement will not only provide protection to your business and personal wealth but it will also give you peace of mind in knowing that your business and family will be financially taken care of in your incapacitation or death.
The Ultimate Guide to the Essential Social Skills in Business
Effective communication and strong relationships are essential for success in the workplace. One factor that can greatly influence these qualities is emotional intelligence, often abbreviated as EQ. EQ refers to the ability to identify, understand, and manage one’s own emotions, as well as the emotions of others. Research has shown that individuals with high levels of EQ are better equipped to handle stress, communicate effectively, and work collaboratively with others (Chamorro-Premuzic & Sanger, 2016).
Research has consistently shown that emotional intelligence (EQ) is an important predictor of job performance and success in the workplace. EQ is comprised of a set of skills that allow individuals to recognize, understand, and regulate their own emotions, as well as the emotions of others. In addition, individuals with high EQ are better able to communicate effectively, build relationships, and navigate complex social situations. As a result, they are often viewed as effective leaders and collaborators, and are more likely to achieve their personal and professional goals.
In fact, a number of studies have demonstrated the significant impact that EQ has on job performance and success. For example, one study of 85 upper-level managers found that those with higher EQ scores were rated as more effective leaders by their subordinates (Law, Wong, & Song, 2004). Another study of 151 employees found that those with higher EQ were more likely to be promoted within their organization over a five-year period (Carmeli, Brueller, & Dutton, 2009). These findings highlight the importance of EQ in the workplace and suggest that developing these skills can lead to significant benefits for both individuals and organizations.
According to a study conducted by TalentSmart, a leading provider of EQ assessments, EQ is responsible for 58% of success in all job types (Bradberry & Greaves, 2009). In contrast, IQ only accounts for about 4% of success in the workplace. This suggests that EQ is a crucial skill set for individuals in any professional field. Fortunately, EQ is a skill that can be developed and honed over time with practice and awareness.
There are several key components of EQ that are particularly important for success in the workplace. These include:
Self-Regulation: This refers to your capacity to recognize and control your emotions. Sometimes treating them when they arise may be necessary. Understanding how to manage your anger is essential. However, it can also cover how to control the feelings you’ll experience.
Self-Awareness: This implies recognizing and understanding your own feelings. Do noisy places make you nervous? Do other people talking over you make you angry? Knowing these truths about yourself shows that you are working on your self-awareness. Being conscious of yourself is necessary for this phase, which can be more complex than it sounds.
Socialization: This category focuses on your capacity to manage social interactions and direct relationships. It doesn’t entail dominating others but knowing how to work with others to achieve your goals. This could entail presenting your ideas to coworkers, leading a team, or resolving a personal disagreement.
Motivation: Strong motivators include external forces like money, status, or suffering. Internal motivation, however, plays a significant role in Goleman’s concept. By doing so, you demonstrate your ability to control your cause and initiate or continue initiatives of your own volition rather than in response to external demands.
Empathy: It’s equally critical to be sensitive to others’ feelings. This may entail learning to identify different emotional states in individuals — for example, can you tell the difference between someone at ease and someone anxious? — but it also requires comprehension of how other people may react to their current situation. Empathy is one of the essential traits in business and business leadership.
A thought leader in this space, Michael Ventura has built a career advising organizations on the importance of emotional intelligence in the workplace. In his book, Applied Empathy, Ventura highlights the value of empathy in business and provides strategies for developing and applying this skill set. With two decades of experience as a leader, facilitator, and educator, Ventura’s work has made impact in with prestigious institutions such as Princeton University and the United Nations as well as corporate clients such as Google and Nike.
Through his work, Ventura advises leaders to focus on the development of EQ in order to help individuals improve their communication, collaboration, and leadership skills, ultimately leading to greater success in the workplace. Experts like Ventura continue to support the growing body of research on the value of EQ in business, and the evidence that organizations who invest in the EQ of their teams help to create a more empathetic and successful professional environment.
And it’s worth noting that EQ isn’t just important for individual success in the workplace, but also for overall organizational success. A study by the Center for Creative Leadership found that EQ was a better predictor of success than IQ or technical skills in the workplace, and that teams with higher levels of EQ tend to be more effective and productive (Boyatzis, Goleman, & Rhee, 1999). By cultivating a culture of empathy and emotional intelligence, organizations can improve their overall performance and create a more positive work environment for their employees.
In conclusion, emotional intelligence is a crucial component of success in the workplace, and individuals and organizations alike should prioritize the development of these skills. The ones that do not only develop a leading edge in their category, but also become a meaningful place to work for their teams. And in today’s rapidly changing talent landscape, the retention of highly capable, emotionally intelligent leaders is one of the greatest keys to unlocking success.
Boyatzis, R. E., Goleman, D., & Rhee, K. S. (1999). Clustering competence in emotional intelligence: Insights from the emotional competence inventory (ECI). In R. Bar-On & J. D. A. Parker (Eds.), Handbook of emotional intelligence (pp. 343-362). Jossey-Bass.
Bradberry, T., & Greaves, J. (2009). Emotional intelligence 2.0. TalentSmart.
Chamorro-Premuzic, T., & Sanger, M. N. (2016). Does employee happiness matter? Journal of Organizational Effectiveness: People and Performance, 3(2), 168-191.
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