Your business is making money. But is it making you wealthy?

RIO GRANDE CITY — A business can bring in revenue, pay its bills, and generate cash for years without necessarily building wealth for the person who owns it.

Rodney Stockton, from Texas Regional Bank gave a very informative and interactive presentation in financial literacy.

“The business is really just like a cash flow engine that creates money so you can live your life,” Stockton said.

But what business owners do with that money once they earn it can determine whether years spent building a company also build their own financial future.

That was the focus earlier this week as Stockton spoke to local entrepreneurs and business professionals during the Rio Grande City Economic Development Corporation’s latest Lunch and Learn at Okashi Sushi Bar & Seafood.

Stockton, who focuses on life insurance and nontraditional financial planning, challenged business owners to apply some of the same discipline they already use to manage their companies — tracking revenue, expenses, cash flow, and where money goes — to their personal finances.

What happens after you make the money?

Stockton described financial planning in three stages: accumulation, distribution, and legacy.

The first tends to get most of the attention. People focus on accumulating assets, increasing returns, and watching their money grow.

But Stockton said business owners should also think about what eventually happens to that money.

“We need to have an exit strategy,” he said.

For entrepreneurs, that can be particularly important because the business itself is often their primary source of cash flow.

Stockton encouraged attendees to look beyond how much an investment earns and consider where their money is held, how it is working, and how much control they ultimately retain over it.

He also used investment returns to illustrate why headline numbers do not always tell the full story.

A positive percentage return one year followed by an equal percentage loss the next can average out to zero while still leaving an investor with less money than they started with.

The larger lesson for business owners was simple: Making money is only the first step. Understanding what happens to that money over time is what can turn business income into personal wealth.

Taking business discipline home

Business owners already make financial decisions every day.

They track revenue, watch expenses, manage cash flow, and decide where to put their money to keep their companies operating and growing.

Stockton’s argument is that their personal finances deserve the same attention.

“If we can get their personal finances operating kind of like their business finances, there’ll be leaps and bounds ahead of most people,” he said.

For the Rio Grande City Economic Development Corporation, the discussion was part of a broader effort to give local entrepreneurs access to business education and other professionals in the community.

Dalinda Guillen, executive director of the economic development corporation, said its Lunch and Learn series is intended for businesses at different stages, from new entrepreneurs to longtime operators.

“We’d like to invite the business community to come and join us for our Lunch and Learn series,” Guillen said. “Whether you’re just getting started as an entrepreneur in your business or you’ve been established for many years, come out and join us and learn how you can make your business better.”

The locations change from event to event, she said, with information about upcoming sessions posted on the organization’s Facebook page.

Lessons that can reach beyond the owner

Some attendees were already considering how the information could be useful beyond their own finances.

Cecilia Hernandez of Grande Garbage Collection Company attended in search of information that could benefit her employees and considered whether financial literacy education or a similar resource could be offered to them.

“Hopefully there’s something I can help my employees with. Maybe there’s a financial literacy course I can offer them. And also for myself and to support the EDC and RIO.”

Erika Padilla of Erika Padilla Insurance attended to learn, connect with other professionals, and identify resources that could potentially benefit her clients. 

“To learn, to connect with more people, to be able to help people, the community,” she said.

Teresa Barrera, whose business works with Texas Regional Bank, attended to learn more about the information being presented.

Those connections are another part of the Lunch and Learn model. The economic development corporation uses the events to combine professional education with networking, giving business owners an opportunity to exchange information and build relationships.

But Tuesday’s financial discussion ultimately came back to the money their businesses generate.

A company can produce revenue and cash flow. For its owner, the bigger financial challenge is deciding how to use that money so years spent building a business can also build personal wealth.