Financial Planning for Business Owners

Business owners face unique challenges—and opportunities—in terms of financial planning. It takes hard work and careful planning to develop ideas into a successful business: continue that tradition by choosing a financial planning strategy that takes advantage of your unique situation.

For business owners who are considering moving to self-employment, a comprehensive plan can help with the adjustment from a situation where a previous employer might have provided benefits, such as health or life insurance or a company pension. Life and disability insurance can be difficult to purchase at first, since many insurers want two years of tax results. As well, self-employed people can gain tax write-offs for some health insurance premiums.

For new business owners, a financial planner can help negotiate a bank loan or line of credit to help fund office space, materials and other business investments. Explore options to address these start-up expenses.

No matter what stage of growth your business is in, contact us today to design a tax-efficient business planning strategy.

Business Succession Planning

After working hard to develop a business, it is important to also enjoy the results. Many entrepreneurs spend years of focused effort building up a business, but then fail to consider how to make the transition to retirement. A financial planner can offer suitable advice in how to plan an effective business succession strategy.

For family businesses, a formal management succession strategy can help ensure a business stays in the family over generations. Depending on the level of involvement of family members, alternative bequests can help make decisions with those who do, and those who not, want to continue being involved in the family business.

Entrepreneurs can work to turn equity in the business into capital that can be used to fund retirement. Business owners can design tax-effective retirement strategies, such as using life insurance policies, paying business founders a salary, or arranging for an heir or heirs to slowly buy up ownership shares.

Life insurance is a consideration when planning business succession. If the founder is nearing the end of his or her life, a well-planned life insurance policy can help successors transition into business owners. Upon death, successors face estate taxes on business values of more than $500,000—with the tax-free amount potentially offset by any capital business losses the owner declared during his or her lifetime. Life insurance is one way that successors can cover the remaining amounts.

Smaller businesses may not need to pay estate taxes, but can still benefit from succession planning.

Contact us today to discuss strategies for business succession.