As many of you know, I have been a business owner for more than 30 years. Working with fellow business owners is one of my passions – and having a financial planner as an integral part of your advisory team has many benefits. Advisors who have a depth of knowledge in financial planning are a great support to business owners as described below.
Creating a comprehensive financial plan
We work with business owners to create plans that consider both personal and business goals. We help owners assess their current situation from multiple angles, develop strategies for growth and to manage risk, and align their personal and business finances to enable overall financial health.
Developing a succession plan
As most business owners know, planning for the future of a business is crucial, whether you intend to pass it on to family members, sell it, or have a planned exit strategy. We work with you, and often your CPA and corporate attorney, to develop a succession plan that facilitates the right transition for you.
Tax planning and optimization
Business owners face unique tax considerations. We work with business owners and their CPA or accountant to develop tax strategies that minimize tax liabilities. We provide guidance on tax-efficient investment strategies and develop options for retirement and employee benefit plans.
Risk management and insurance
Business ownership can sometimes feel like it is fraught with risk and there is a need to protect personal and business assets from unforeseen events. We assist you in thinking through your insurance needs, such as business interruption, liability, and key person insurance.
When I think about how we can help business owners more, I almost always land on the idea that the sooner we are engaged as a part of your team, the more help we can provide. That said, below I start with the end – business exit – where we usually are brought into the process. Then, I work backwards and share ideas around how we can be helpful earlier in the business ownership lifecycle. Through our custodian, Raymond James, we have access to world-class resources for all aspects of these transactions. This includes investment banking, mergers and acquisitions, financing, etc.
Long before an owner is ready to transition a business, they should build out an exit plan, update their estate plan, and update or draft a financial plan.
- Succession plan – Building an effective succession plan is a team effort, and our role is to help the owner and work in alignment with their CPA/accountant and corporate attorney. The development of a succession plan smooths the transition of the business to the next generation or a new owner. Together, we help the owner evaluate the business’s value, structure the sale or transfer, and optimize tax implications. We also help facilitate family conversations around the transition, especially if other family members are involved.
- Estate planning – While an estate planning attorney drives the development of your estate plan, we help ensure the transfer of business and personal assets, align beneficiaries, minimize taxes, and provide for family and charitable intentions.
- Financial independence planning – This step often includes the business owner and their significant other(s). It can be emotional, bringing up new aspirations, but also fears and concerns about how best to manage the money going forward. And, for you as an owner, there may be deep emotional / personal connections to the business that need attention. Where will you place your mental, physical, and/or emotional horsepower once you no longer work within the business?
Business Growth and Operations
As your business gains footing, you hire more employees and position for growth. We focus primarily on risk management, employee benefits and retirement planning, and the building blocks of succession planning.
- Risk management – We help you identify and manage various business risks, such as insurance coverage, contingency planning, and implementing risk mitigation strategies. Asset protection strategies to safeguard your personal and business assets are also important at this stage. Specific things to prepare for include death, disability, divorce, and disagreements (between owners, with employees, vendors, clients, etc.)
- Employee benefits and retirement planning – We work with business owners, and their leadership teams, when appropriate, to design and implement employee benefit programs, such as 401(k), SEP IRA, and other incentive plans.
- Succession planning – Determining the value of your business year over year will help you decide what elements of the business to focus on to accelerate business value. You can build value by increasing your cash flow (EBIDTA) and/or improving your multiple.
Even before you have a business up and running, we should talk about two key things: 1) business structure and funding and 2) review of your personal financial plan for impacts associated with business ownership.
- Business structure and funding – We have a good amount of experience helping people think about their business structure and the pros and cons of a sole proprietorship vs. partnership vs. corporation, etc. We can also help you think through a funding strategy with your own financial plan in mind.
- Personal financial planning – Reviewing the impact of business ownership on your own financial plan, especially if you have a family, is a crucial step. We will look at budgeting, managing personal debt, and ensuring you have a financial safety net in place.
Throughout the business lifecycle, we function as strategic partners, providing ongoing guidance, monitoring financial performance, and helping business owners make informed decisions to optimize their (and their families) financial well-being. We play a critical role in aligning personal and business financial goals and support the success and long-term prosperity of the business owner. — Sherri Stephens
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