Often the businesses that get attention are the moonshots and the big bets. We read articles featuring the “VC funded” and the billion dollar overnight successes. The auspicious INC 500 list honors companies that have grown their revenues exponentially, but not necessarily companies that are profitable or that will be around for long. In reality, some of the most successful businesses practice controlled growth and are fiscally conservative. This month, let’s look at a dozen conservative money ideas that might not excite you, but also might help you build wealth.

1. Get Out of Debt

Perhaps you took a business loan or borrowed some money to get your practice started. Mission one: clear that debt. It doesn’t matter the interest rate, holding debt will prevent you from building wealth in your company and life. You’re not alone to shun debt; S&P 500 companies with no long-term debt include Facebook, Chipotle, Monster Beverages, Visa (ironically?), and Whole Foods.

2. Know that Debt is Risk

Business is risky. A business with debt on the books is very risky. People don’t calculate the risk of debt, which is why it seems like a good idea borrow money at 4%, to invest for a possible 12% return. Sometimes this works, but it’s an additional gamble that you don’t need whilst trying to build and grow your business.

3. Build your Own Line of Credit

Too many businesses run without any cash on the books, and instead rely on a line of credit as a safety net. This is a sure-fire way to stay poor. If a winter storm shuts you down for a month (like it did to us a couple years ago), your “safety net” will put your company back into debt. Having cash on hand (i.e., retained earnings) is good financial practice, and it puts your company in a safe position to weather the occasional disaster, or to take advantage of deals that might appear from time for time. For example, say a competitor comes up for sale, or someone needs to unload a stockpile of medical equipment for pennies on the dollar. You can only jump at such opportunities if you have the cash.

4. Have a Budget, not Just a P&L

You should review your profit and loss (P&L) every month. However, evaluating your practice only through its P&L is like trying to drive a car by looking through a rear-view mirror. Your P&L shows you what happened last month, not what’s coming this month (or the one after that). Having a budget for your business is like looking out the windshield—you can see where you’re going. As a side, if you don’t have either you’re driving blind.

5. Don’t Sign a Personal Guarantee

Whether it be for a business loan or a lease, personal guarantees seem irrelevant…until things go wrong. I was meeting with a wealthy entrepreneur and he asked me how many rented locations my company had. I had 5 at the time. He then asked,
“Did you personally guarantee the leases?”
“Yes.” I said.
“You’re on the hook for a lot of money if the business fails.” He said.
He then told me how early in his career one of his businesses failed, and how he was on the hook for millions of dollars because of personal guarantees. After hearing his story, and per his advice, I began refusing to sign personal guarantees. To date, I’ve never once been turned down from doing business. A huge liability gone, just by saying “no.”

6. Test Your Advertising

Most advertising doesn’t work. So, spend just a little at a time and test it like crazy. Make sure advertising produces a positive return before investing substantial sums.

7. Know Your Numbers

Many practice owners can’t tell me their revenues, let alone their profits. You shouldn’t need to ask your accountant for such things. Master your numbers. Know how much money you have in your business and in your personal life. Know your net worth! Only by knowing your numbers will you be able to set and achieve financial goals.

8. Get your Personal Finances in Order

You can’t earn yourself to wealth. Many people try and fail because they don’t invest adequately and they unintentionally overspend. It’s crucial that you have a plan, and that includes a monthly budget. Setting a personal budget is good practice—once you master a personal budget, begin to do the same for your business.

9. Plan for Retirement

You’re going to want to retire someday; are you getting prepared? If you’re self-employed as a counselor, begin by saving 15% of your income. Since your practice doesn’t have a 401K, you’ll probably want to start by maxing out a ROTH-IRA every year (which grows interest free). If you’re single, you can contribute up to $5,500. If you’re married, $11,000.

10. Remember Business Expenses Count

People have a mental disconnect with their business expenses. They overspend on rent. They overspend on dinners out. They purchase all sorts of things they would never buy in their personal lives because they justify “It’s for the business” or “It’s tax deductible.” In reality, they’re just being careless with their spending, and it hurts their profit and income.

11. Consider Purchasing Your Office

You probably wouldn’t want to rent your home your entire life. Purchasing a home helps you to build wealth. If your business is stable and you’re committed to a location, consider the same for your business. Let’s be real, counseling practices often don’t have a huge market value, but if you purchase your commercial office, after 20 years of paying rent to yourself you might have built a surprising amount of equity.

12. Spend Below Your Means

Marketers are highly skilled, and they have one job—to make you feel like you need to buy whatever it is they’re selling. Many of us live what Thomas Stanley calls “a high consumption lifestyle” and its effect is devastating. In his book “Stop Acting Rich” Stanley shows how most millionaires in the United States didn’t get there by making huge sums of money, they got there by saving and by living on less than they made.

What do you think of these conservative financial ideas? Share your thoughts on Twitter @anthonycentore or @thriveworks.