Succeeding as a small business owner requires a pretty unique skill set. First, you need great ideas (and the confidence to do something with them). You need to be passionate about what you’re selling—and know how to sell it. You need an instinct for really good customer service. And you need to grasp smart delegation and careful time management.

A lot of these things you probably read about in Small Business Ownership 101. But there’s one thing missing from that list many new entrepreneurs often overlook: Knowing how to effectively invest your money. That assumes business owners are investing at all. In fact, it’s a long-standing misconception that your company is the only investment you will ever need.

That’s a pretty risky misconception. For today’s small business owners, understanding how to invest your personal capital wisely is the key to attaining financial stability in your personal life. Why? Because without attention to your personal finances, all of your eggs will be in one basket. And if the business goes away, where will you be financially? That means it’s especially important to follow basic personal finance and investing guidelines to protect yourself (and your business) if anything goes wrong.

In other words, it’s not a great idea to put all your bets on just one thing. Doing so can cause business owners to take on too much risk and endanger their business and income.

Here are a few specific investment strategies that’ll help you enjoy a healthy financial future—and to keep your hard-earned money protected.

Establish an Emergency Fund

Before you even start investing, you should start saving. A business will forever have its ups and downs, meaning there will be times throughout the year when income is great—and not so great.

That’s why it’s critically important to set up an emergency fund account containing enough cash to cover the months when your income doesn’t quite cover your basic living expenses. Keeping at least three to six months’ worth of living expenses is a good rule of thumb to keep yourself protected should anything go wrong.

Money market accounts are good places to store this emergency fund. They’ll give you a better return than most traditional savings accounts while remaining free of the unpredictability that can come with stock market changes—all important characteristics for short-term savings.

Diversify Your Investments

Diversification can be summed up with one sentence: “Don’t put all your eggs in one basket.” The idea is that if one investment loses money (ahem, your small business), the other investments will make up for those losses. That’s why it’s always in your best interest to look for investment opportunities outside of your business and diversify those.

But in order to diversify correctly, you need to know what kinds of investments to buy and how to diversify within a particular investment category. Here are a few tips to help you get started.

Look for Balance Instead of Quantity

Having a lot of investments does not make you diversified. To be diversified, you need to have lots of different kinds of investments.

Regardless of the number, if your portfolio includes investments spread across various asset classes, it's considered balanced. This is a good goal, because it’ll help you reduce risk while also maximizing return. For example, if your portfolio is particularly heavy in one class and that class underperforms, things aren’t looking too good for you. But if your portfolio is spread out relatively evenly and just one asset class encounters a rough patch, you should still have the others performing well enough to get you through it.

Here are the four main classes of assets you should consider investing in:

  • Stocks or equities
  • Bonds or fixed-income instruments
  • Money market or cash equivalents
  • Real estate or other tangible assets

Diversify within Investment Categories

You’re not done quite yet. Once you've diversified by putting your assets into different categories, you need to diversify again. It's not enough to buy one stock, for example—you need to have a lot of different types (meaning different industries) of stocks in that part of your portfolio. This will protect your finances from totally being wiped out when a single industry takes a hit. It’s also good practice to explore industries outside of the one your business is in, even if that’s the area you feel most comfortable. This adds an extra layer of security when your business’ industry enters a slow period.

Rebalance your portfolio regularly

Despite what a lot of people may think, diversification isn’t a one-time task that you can check off your list. You should check your portfolio often and make adjustments when the risk level isn’t aligned with your financial goals. It’s recommended that you rebalance your portfolio at least two times per year.

To make this process as easy as possible, you can use a robo-advisor such as Betterment. This service will automatically rebalance your portfolio for you and keep you optimally-diversified.

Invest In Your People

At the core of almost every successful business venture are talented people on your team. That’s why, as a business owner, one of your most crucial investments should be hiring people who bring the right skills, experience and passion to your team.

But investing time in hiring the right people is just part of the story. It’s equally important to make the investment in retaining those key employees so they actually want to stick around. According to research conducted by Glassdoor, more than half (57%) of employees say benefits and perks matter more to them than financial compensation. In fact, in that same research, four out of five workers say they would prefer new benefits over a pay raise to keep them satisfied at their job.

Perks & Investments

These perks and benefits can include everything from setting up a profit-sharing plan to a matching 401(k) or retirement plan. Investing in an exceptional benefits package can make a huge difference, too, like life insurance, a strong health insurance program, or even free gym memberships. It’s also important to not overlook things that are a little less tangible, like investing in an office culture people want to be a part of. This can mean something as simple as enhancing your office digs by adding a pool table, ping pong, or shuffleboard table so employees can blow off some steam on a stressful day.

Mentorship

Don’t forget to consider making mentorship, professional development and ongoing employee training a part of your investment, too: According to LinkedIn’s 2018 Workforce Learning Report, a whopping 93% of employees would stay at a company longer if it invested in their careers. By providing opportunities for professional development, employers are investing in their employees and ultimately strengthening the backbone of their business. So the next time an employee asks about an upcoming conference or seminar they want to attend, take a step back, consider the benefits and say “yes.” It’s a win-win for everyone involved.

Ramp Up Your Retirement Savings

A recent survey by Paychex found that only 30% of small business owners felt even “somewhat confident” that they will be financially ready to retire at some point. The reason? A lack of savings. Almost three-quarters of those surveyed said that simply being able to save more would ease their concern.

To build and protect your personal finances down the road, it’s crucial that you not only start saving for retirement, but that you do whatever you can to contribute at least 10% of your income every year (or even more). Why? Because you don’t get to reap the rewards of common employee benefits, like an employer match or a 401(k).

One good way to start is by simply setting up an auto-transfer system with your bank, automatically transferring a pre-set amount of money out of your checking account and into your savings account every month. By doing this, the saving part will hardly be noticeable and, equally importantly, you won’t be able to talk yourself out of it when you get paid.