Achieving financial freedom: Part 10 –Balance Sheet

This is the last post in the achieving financial freedom through your lifestyle business series. While this series is only a synopsis of what is possible, it is up to you to explore these topics further.

Succeeding in business all boils down to one thing, your willingness to hustle. Where there is a will, there is always a way.

The information that was discussed in parts 1 -9 is summarized in the balance sheet below:

Balance Sheet

The balance sheet is the statement that estimates your business worth. Typically, assets like customer lists and websites will not show up in the balance sheet given to outsiders, nonetheless, you should value them for internal purposes.

It is important to analyze, measure and track your results. What gets measured, gets improved. If you know the value of your intangible assets, then you have a more complete picture when determining the value of your business.

The customer lists and websites are classified as assets because of their ability to keep generating income over extended periods of time. With a balance sheet like this you can take an extended vacation and come back to a money making business. However, there are limitations as your assets eventually hit the decline phase. The balance sheet should be adjusted to reflect the decline in old assets and the increase due to the addition of new assets. It is a good idea to compare the net worth of your business over time to monitor growth

Keep in mind that the assets alone are not able to generate income but it is the systems around the assets that makes for the difference. Finding systems that work and implementing them around your assets is the core principle in building a lifestyle business that allows for financial freedom.

You can also see how cash builds up over time when the extended cash flow concept is applicable. The past work done to increase the value of the customer lists and website is still working to produce income years into the future. However, as mentioned earlier, this income will eventually hit the decline phase which is why innovation is essential. Innovation is the key to continous net worth growth.

Hope you have enjoyed this series.

This article is part 10 (final) in the building financial freedom from your lifestyle business series

Part 9  

 

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  1. Pingback: Achieving financial freedom: Part 9 -Extended cash flow cycle - lifestylecpa.com | lifestylecpa.com

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