Strategies for Building Your Small Business
Constant Planning Is A Key To Success
(StatePoint) As an entrepreneur, you are the expert in the goods and services you offer customers. However, you may be less familiar with the financial aspects of running your business.
Incorporating a CERTIFIED FINANCIAL PLANNER™ professional into your stable of advisors is a smart way to ensure that you’re growing your business sustainably. Here are some important financial planning strategies a CFP® professional can assist you with:
1. Selecting a corporate structure: Each type of corporate structure is subject to its own tax code and financial liabilities. Determining which structure makes the most sense for your business is fundamental, but complex, given the wide range of factors involved. A CFP® professional can help you navigate this decision to your advantage. As your business scales, remain in conversation with your advisor to ensure that your corporate structure classification is not adversely impacting your cash flow.
2. Sorting your expenses: Your business feels personal, but it’s important to keep your business and personal expenses separate. A CFP® professional can help you establish a plan for managing personal and business finances in a way that allows you to reach your financial goals.
Side note for expense sorting: Be sure to deduct all overhead when preparing your taxes. If you’re not deducting expenditures such as travel, auto expenses, home office utility bills, marketing materials and continuing education associated with your industry, you’re leaving money on the table.
3. Saving for retirement: While retirement may not be top of mind when launching your own business, it’s important to plan for it. One of the great benefits of being your own boss is having the freedom to maximize your retirement savings. A CFP® professional can help you make sense of options such as IRAs, 401(k)s with profit-sharing and solo 401(k)s, and help you select the one that will reduce your taxable income now and pave the way for a comfortable future.
On a related note, building a retirement plan into the benefits you offer your employees will make your company a more attractive place to work, helping you secure the best talent.
4. Maintaining personal financial health: While you’re growing your business, it can be easy to lose sight of your family’s financial health. A CFP® professional can help you protect your personal assets and continue moving toward your other financial goals at a time when your business seems like a top priority.
These are just a few of the areas in which a financial advisor can help your business be successful. They can also offer cash flow analysis, advise on your insurance needs, create a succession roadmap and more. For additional insights into small business financial planning, and to find a CFP® professional to work with, visit LetsMakeAPlan.org.
Launching a small business is both an adventure and a ton of work. Seek expert assistance with key financial planning strategies so that you can focus on the aspects of your business you are most passionate about.
