Running a business demands your full energy and attention. Your waking hours are consumed by the daily management and sustainability, and even sleepless nights are dedicated to the minutiae others overlook. This is the life of a dedicated small business owner – and it’s often a challenge! In fact, amid the daily grind, it’s easy to lose sight of the big picture of your business’s overall financial health. To address this, you can use the five-step guide below to help you focus on key aspects of your small business financial wellness.
Small Business Financial Wellness Step 1: Revisit Your Legal Structure
As your business evolves and grows, the initial decision to operate as a sole proprietorship or partnership may no longer meet your needs. It’s common for new business owners to start with these structures, but now you might require a more formal business structure, such as an LLC, corporation, or specific partnerships. These structures offer asset protection from creditors and can enhance your business’s appeal to potential lenders if you seek financing for expansion.
Small Business Financial Wellness Step 2: Optimize Employee Retention
Ensuring your employees’ long-term loyalty requires maintaining competitiveness as an employer. Assess the benefits you offer to ensure they create the right balance. A comprehensive health plan, disability benefits, and group life insurance are valuable to employees, while retirement plans and long-term care benefits demonstrate your commitment to their well-being. These benefits contribute to small business financial wellness by boosting employee morale and reinforcing their value as part of your team. For those key employees crucial to your operations, consider offering special benefits like a deferred compensation plan or a bonus life insurance plan to further incentivize their dedication.
Small Business Financial Wellness Step 3: Review Your Insurance
Regularly reviewing and updating your insurance coverage is a crucial step to protect your business from potential disasters. As your needs change, it’s essential for your insurance to adapt as well. Collaborating with a financial advisor can be highly advantageous in this area. They can help identify any potential gaps in your coverage and ensure that you and your business remain adequately protected. By staying proactive in managing your insurance, you can safeguard your business’s financial well-being.
Small Business Financial Wellness Step 4: Plan for the End
Regardless of whether it’s by choice or circumstance, there will be a time when you will depart from your business. Planning for this inevitable event now, in the present, will shape the outcome of your exit in the future. To ensure a seamless transition and minimize tax implications, it’s crucial to have a well-thought-out succession plan in place. This may involve implementing a properly funded buy-sell agreement and ensuring sufficient cash reserves to purchase your business shares upon retirement. By proactively addressing these aspects, you can set the stage for a successful and financially sound exit from your business.
Small Business Financial Wellness Step 5: Work with a Financial Advisor
Small business owners often take on a self-reliant mindset, but it’s challenging to manage all the demands of the business while addressing needs in your personal life, too. Engaging a professional financial advisor can be the key to striking a successful balance between your business and personal goals, while optimizing your small business financial wellness. Although it may feel unfamiliar to seek assistance, small business owners who leverage the expertise of financial advisors discover that they gain greater control over the wealth they have diligently built. Embracing the support of a financial advisor empowers you to optimize your hard-fought success and achieve a stronger financial future.
Are You Looking for a Trusted Professional?
At Attleboro Wealth Management, we offer experience and vision to help you guide the future of your small business. We can assist with goal setting and strategies to strengthen the long-term financial health of your company. If you’re ready to take the next step in keeping your small business healthy, contact us to start a conversation today.