![]() ![]() ![]() Many also want to leave their business to the next generation, but without a will, ownership succession becomes hazy. From a personal perspective, business owners can't afford not to have a will and estate plan to ensure the business doesn't fold upon their death. Prepare your exit strategiesįinally, small business owners should prepare their exit strategies - for both their personal legacy and their business. ![]() As a result, it makes sense for small business owners to target low-risk investments for the rest of their investment portfolio. A small business is a piece of a larger investment portfolio, but many business owners don't recognize this.īeing in business represents a significant risk, even if it seems like you're in a safe industry. Diversify everywhereĪnother important thing small business owners should remember when creating their personal financial plans for themselves and their business is diversification. Simplified Employee Pension ( SEP) IRAs and individual 401(k)s both enable small business owners to plan ahead for the days when they finally retire. However, most overestimate what their business might be worth, especially when looking decades into the future. Many small business owners don't save for retirement because they believe they'll be able to sell their business and live off the proceeds of the sale in retirement. It can be tempting to just keep pouring your money back into the business, but that can make it difficult, if not impossible, to save for retirement. Remember to plan for retirementįor small business owners, retirement planning actually sits at the crossroads between personal and business financial planning. The Small Business Administration is also an excellent resource for business owners, not only for information and guidance but also, in some cases, for low-interest business loans. After all, today's digital world has brought a wider array of potential funding options that range from venture capital and private equity to crowdfunding, business loans, and even more creative options like a small business incubator or accelerator. In some cases, though, it might make sense to cede some of that risk to another party. Using your own capital, or, in a worst-case scenario, your own credit cards, places you at significant personal financial risk if something happens to the business. However, just as you would diversify your investment portfolio, so you may also want to diversify your business-related risks. Most small business owners invest in their own businesses using their own money and time, which may be appropriate in certain situations. The easiest place to look is at the many available funding options for your business. You may also want to look at other places where you can further separate yourself personally from your business. ![]() Consider alternative funding options to diversify your business-related risk On the other hand, some financial goals for your business might include increasing sales to a particular amount, finding more customers, or establishing a certain percentage of growth rate. For example, some personal financial goals might include setting up and contributing to an education fund for your child, boosting your retirement savings, funding and going on a vacation, and buying your first home or downsizing when your children move out of the house. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |