Owning a business is no small task. There are many challenges that business owners face. Staying on top of day-to-day operations, weathering economic changes, calculating taxes, and keeping secure finances are just a few. 

Planning an exit strategy and saving for retirement are other significant issues that can cause financial concern. This article will look at the top 5 concerns that keep business owners up at night: 

  1. Keeping Business Taxes Low 

Taxes can take a huge bite out of a company’s income. Ensuring that your business takes advantage of deductions available to it and incorporates tax planning strategies is key to maintaining value. Good tax management starts with selecting an appropriate business structure. Certain business structures are more tax advantageous than others. 

There are tax strategies that can be considered to see if they fit your personal business ownership situation. Examples of these include trusts, individual pension plans, retirement compensation arrangements, and charitable donations. 

  1. Setting Up an Exit Strategy 

At some point, a business owner will want to retire or pursue another direction in life. To ensure the company is not left floundering, it is important to set up an exit strategy. Such a strategy can include turning the business over to a trusted relative or selling it to an interested buyer. 

If the company has multiple owners, having a clear exit strategy is even more important for business planning purposes. The last thing you want to do is leave your partners without a replacement. In this case, an exit strategy should be clearly defined and agreed upon between all owners. 

  1. Protecting the Business from the Loss of Key People 

By definition, a small business typically has minimal staff. Yet, these staff members can often play key roles in the success of the business. The loss of an important employee can cause significant hiccups in the continued operation of the company. 

It is important to consider a number of different financial planning safeguards to protect against this type of loss. Key Person Life & Disability Insurance can cover a loss of income to the business in the event that a key employee passes. 

In addition, buy-sell agreements provide compensation to family members and can ensure transparency during a transfer of ownership.

  1. Choosing a Qualified Retirement Plan 

There are several different qualified retirement plans available to small businesses. A few include the 401(k), Defined Benefit Pension, SIMPLE, and Simplified Employer Pension. A financial planner can work with you to decide which retirement plan is most appropriate for your business and your employees’ needs. 

  1. Protecting the Business From Potential Liability 

A lawsuit against your business can happen at any time. It is important to have appropriate protection in place to protect personal assets and the business as much as possible. 

This approach begins first with an appropriate entity structure but can also extend to an insurance policy that limits losses due to negligence or failure to use reasonable care. 

Wrapping Up 

If you are a business owner concerned about your personal or business finances, contact us. We can work with you in the financial planning process to ensure that you have competent strategies in place to secure your future.