Financial planning for entrepreneurs: How to build wealth while building a business
Published 8 August 2025
Running a business is bold, exciting, and often unpredictable. But if you want your business to grow without sacrificing your future, financial planning is not optional. It is essential. Whether you are just starting out or scaling your operation, strong financial foundations will support your ambition and protect your future.
In this guide, we will break down what entrepreneurs in the UK need to know to take control of their money, reduce risk, and plan for long term success.
1. Keep business and personal finances separate
Keeping your business and personal finances separate is one of the most powerful steps you can take as an entrepreneur. It simplifies tax returns, protects your personal assets, and gives you clearer insight into your cash flow.
✅ Open a dedicated business bank account
✅ Use accounting software such as Xero or QuickBooks
✅ Track expenses and income separately
Keeping things clean from day one saves you stress and money later.
2. Understand your tax responsibilities
Entrepreneurs in the UK face a range of taxes inclduing Corporation Tax, VAT, National Insurance, and more. Staying on top of these obligations helps you avoid penalties and keep your business healthy.
✅ Register for necessary taxes early
✅ File returns on time
✅ Work with a qualified accountant
✅ Use tools like HMRC’s Making Tax Digital compatible software
Tip: You may be eligible for certain allowances, like an employment allowance or dividend tax relief. Know what you are entitled to.
3. Build a financial plan tailored to your goals
Your business is unique. Your financial plan should be too. This is not about perfect predictions, but clarity and preparation.
✅ Forecast revenue and costs over the next 12 to 36 months
✅ Create realistic cash flow models
✅ Build an emergency buffer
✅ Identify investment opportunities or funding needs
A financial adviser can help you balance business reinvestment with personal wealth building.
4. Protect your business and your peace of mind
Entrepreneurs often overlook protection until it is too late. Safeguard your income and your business continuity with the right cover.
✅ Public liability insurance
✅ Key person insurance
✅ Income protection or critical illness cover
✅ Cyber insurance if you are online based
Protection is not paranoia. It is preparation.
5. Think long term: Estate and succession planning
Planning for the unexpected now gives you and your team security down the line.
✅ Write a will (especially if you have dependents or cofounders)
✅ Set up shareholder or partnership agreements
✅ Consider powers of attorney
✅ Review life insurance and beneficiaries
Legacy is not just for big corporations. It is for anyone who wants to leave things better than they found them.
6. Prepare for retirement on your terms
Many entrepreneurs hope their business will fund retirement. But this can be risky. What if the business does not sell for what you need?
✅ Set up and automate regular pension contributions, even if they are small to start with
✅ If you are a limited company director, increasing employer pension contributions before your company year end can reduce your Corporation Tax bill, depending on your company profits and your personal annual allowance
✅ Speak to a financial planner to structure your retirement savings in a tax efficient way
The earlier you start, the more options you will have later.
7. Review regularly and reach out for expert support
Your life and business evolve. So should your financial strategy.
✅ Set calendar reminders for financial reviews (quarterly and annually at least)
✅ Track your plan against your goals
✅ Work with an accountant, financial planner, or coach who understands entrepreneurial life
Having a trusted sounding board helps you adapt and stay ahead.
FAQs: Financial planning for entrepreneurs
What is financial planning for entrepreneurs?
It is the process of creating a strategic approach to managing personal and business finances. This includes budgeting, saving, investing, tax planning, and retirement preparation.
How do I start planning for retirement as a business owner?
Set up a personal pension, make regular contributions, and avoid relying solely on your business sale as your pension.
What taxes should I prepare for as a UK entrepreneur?
Corporation Tax, VAT, National Insurance, and potentially Capital Gains Tax, especially if you sell your business in future.
Why is separating personal and business finances important?
It makes accounting cleaner, protects your personal assets, and ensures clarity for tax and investment purposes.
Should I hire a financial planner or do it myself?
You can start alone, but a professional helps you spot opportunities, reduce tax, and avoid costly mistakes. Think of it as an investment in growth.
Financial planning does not limit you. It empowers you. With the right systems, advice, and mindset, you can grow a thriving business and a secure financial future.
You do not have to figure it out alone.
☕ Curious about if working with a financial planner for entrepreneurs could support your next move? Click here to arrange your no obligation Clarity Call and see what is possible.
Your wealth wingwoman,
Shalini
P.S. It is never too soon, or too late, to start planning for your future self.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
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