The 5 Levers For An Entrepreneur's Most Valuable Creation:Personal Wealth

You would think that entrepreneurs are the most skilled people on the planet at manufacturingwealth. And you'd be incorrect.Â

I've been learning new ideas from my friend Garrett Gunderson who recently merged his businesswith Robert Hirsch of The Elevation Group to create the Wealth Factory, with a mission to helpentrepreneurs learn the skills they need to create more and better wealth of their own. I spoke withGunderson and Hirsch about the ways to grow a company faster several months ago. And Gundersonshared his tips about the biggest financial gaffes and mistakes he sees entrepreneurs continuallymaking last July.

Robert Hirsch and Garrett Gunderson teach entrepreneurs how to become better at building theirpersonal wealth through the Wealth Factory. (Image courtesy of WealthFactory.com)

Today I invited the two to join me again for a visit about the five financial pillars entrepreneurs canuse to move beyond the creation of new jobs and returns for investors to also create lastingeconomic wealth of their own. Here they are in an exclusive preview interview with ForbesEntrepreneurs:

Lever 1: Recover Cash Flow. How much of your current revenue is escaping out the door,unchallenged, that could be working harder for you in the growth of your company or be providingyou with additional profits applied directly to your bottom line? Too many entrepreneurs are soentirely focused on increasing their topline revenue they are missing any number of profitabilityopportunities they could achieve without taking any risks or working any harder that are directlyunder their nose.

For example, most businesses are inadvertently paying too much in taxes for things they can directlycontrol. As an example, do you own or lease the building you work from? Which is better from aprofitability and cash flow standpoint? And if you own your own building, do you use the standarddepreciation schedule to calculate your taxes? Most entrepreneurs (and even many tax accountants)are unaware that you can depreciate various aspects of your building investment separately forgreater tax savings.

Are you paying the minimum payment on one or more business credit cards? Gunderson and Hirschadvise entrepreneurs to learn to "be the bank" and divert the debt service revenue you're currentlypaying to be coming back your own way. Consider this: the average savings Gunderson sees in evena small business for a closer examination of cash flow is more than $11,000 a year. For larger firmsthe sum can be substantially more. Smart management of cash flow can be one of the most efficientways of reinforcing your wealth and your company by finding all of the ways to bring your ownmoney back.

Lever 2: Strategically Engineer Wealth. Do you employ investment advisors who are compensated atleast in part on sales commissions? Consider this point: A retirement planner's primary interest is inbuilding the level of assets under their management instead of looking at the bigger picture ofbuilding your wealth. For example, if you're paying higher interest on any business loan than thelevel of interest you're gaining on the retirement investment, the choice should be obvious - stopadding to the retirement investment until you're retired the loan. Instead, work to create a financialscorecard that allows you to measure your progress from a big picture perspective and develop awealth architecture that can serve as a personal financial roadmap for you. With these strategies inplace, you can take back the control of your outcome and can measure for yourself the impact youmake with each step.

Lever 3: Accelerate Investment Income. Do you have an investment philosophy? The WealthFactory advises you to develop the right philosophy for you to avoid being prey to somebody else'splan that isn't fitting for you. Within that philosophy, you can establish a solid financial foundationthat protects your security and allows you to swing for the fences within the business you decide topursue. With that foundation in place (to keep personal property and savings protected) you canexercise the ultimate "unfair advantage" by investing in what you know - your own business and yourarea of expertise. How many entrepreneurs have lost both business and homes by having personaland business interests intertwined? Too many to count. And how may successful entrepreneurs havediverted money from the business they know--dentistry, service practices, etc.--into arenas theydidn't know, such as real estate, with terrible outcomes. Again, perhaps beyond number. Instead,

protect your financial foundation, then swing for the fences by growing the business bigger andbetter that you know better than anyone else, according to Gunderson and Hirsch.

Lever 4: Scale Business Revenue. To that end, Gunderson and Hirsch advise entrepreneurs toadvance their businesses carefully by "chess boarding" the business game in advance. "Before youplay, be sure you've created a game worth winning," says Hirsch. For example, is becoming the bestearth-friendly cleaner in your region worthwhile if it equates to a market potential of only $1-2million? Perhaps you need to turn your attention to the "Next Next Next Level" (the moonshot)instead, and consider other avenues your core capabilities can address (perhaps the technology thatcleans your clothing could clean your carpet or your car or your building as well, or perhaps youcould sell the components to others online.) Also, learn to consider the "why". When your businessincorporates a social mission that is worthwhile to you and to others, it will inspire a greater passionin you and in your employees and others that will also serve to propel your financial success.