Financial Planning for Business Owners, Build More Than Just a Successful Business
Owning a business often means wearing many hats. You’re focused on serving clients, managing employees, overseeing operations, and planning for growth. With so many responsibilities competing for your attention, personal financial planning can easily take a back seat.
The challenge is that many business owners unintentionally tie nearly all of their financial future to the success of their company.
While your business may be one of your most valuable assets, it shouldn’t be your only financial plan.
Separate Your Business and Personal Financial Life
One of the healthiest financial habits a business owner can develop is treating personal finances separately from business finances.
Your personal financial goals, retirement, emergency savings, investing, and estate planning, shouldn’t depend entirely on business performance.
Creating financial independence outside your business provides greater flexibility and peace of mind.
Build a Retirement Plan Beyond Your Business
Many entrepreneurs expect that selling their business will fund retirement.
That may happen but market conditions, buyer demand, and business valuation can all change over time.
Taking advantage of retirement plans designed for business owners can help diversify your retirement income while offering valuable tax advantages. Depending on your situation, options may include:
- SEP IRA
- SIMPLE IRA
- Solo 401(k)
- Safe Harbor 401(k)
- Cash Balance Plan
Each has different contribution limits and planning opportunities, making it worthwhile to discuss your options with a financial professional.
Protect Your Greatest Asset
Your business depends on you.
Insurance strategies such as disability insurance, life insurance, business liability coverage, and key person insurance can help protect your family, employees, and business if something unexpected occurs.
Risk management is just as important as investment management.
Start Exit Planning Early
Whether you plan to sell your business, transition it to family members, or simply reduce your workload over time, exit planning shouldn’t begin the year before retirement.
Starting years in advance can help increase business value, improve tax efficiency, and provide more choices when you’re ready to transition.
Make Tax Planning a Year-Round Process
Successful business owners know that tax planning doesn’t happen only in April.
Regular conversations with your CPA and financial advisor throughout the year can help identify opportunities to manage taxable income, maximize retirement contributions, and improve overall financial efficiency.
Bringing It All Together
Your business may be your passion but your financial future should extend beyond your business.
A well-designed financial plan helps coordinate your business, retirement, investments, insurance, taxes, and estate planning into one comprehensive strategy.
At Paragon Wealth Management, we work with business owners to help align their personal financial goals with the success they’ve built in their businesses.
If you’d like to discuss your current financial plan, or build one from the ground up,we’d be happy to start the conversation.
About Jonathan
Jonathan values the confidence given to him by his clients and works hard to provide individualized recommendations, focusing on his clients’ long-term goals and objectives. He graduated from The United States Military Academy at West Point in 2002 with a B.S. in Systems Engineering and International Relations. Jonathan was a proud officer in the US Army before entering the finance industry. Having earned the Certified Financial Planner (CFP®) certification, he now uses his financial knowledge to help both civilians and active duty/veterans in business and personal services as a financial planner.
In his spare time, Jonathan enjoys playing golf, working out, traveling, and donating time and effort to many local Veterans Service Organizations (VSOs). He and his wife, Linda, reside in Chalfont, PA, with their little dog, Canelo.
The opinions voiced in this material are for general information only and are not intended to provide specific investment or tax advice, or recommendations, for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Any securities mentioned here are for informational purposes only and are not recommendations to buy or sell any security.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Paragon Wealth Management and Great Valley Advisor Group are separate entities from LPL Financial.
Advisors associated with Paragon Wealth Management may be either (1) registered representatives with, and securities offered through LPL Financial, Member FINRA/SIPC, and investment advisor representatives of Great Valley Advisor Group, or (2) solely investment advisor representatives of Great Valley Advisor Group, and not affiliated with LPL Financial.
Jonathan Childs is solely an investment advisor representative of Great Valley Advisor Group and not affiliated with LPL Financial. Any opinions or views expressed by Jonathan Childs are his own and are not those of LPL Financial.