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Published by Esperanza Brindle, 2019-11-12 06:45:37

8 Financial Planning Tips for Small Business Owners

Clarke & Brownrigg is your trusted partner to help grow your business. As the premier public accounting firm in Salt Lake City, we have the people, the tools, and the resources to guide and assist you with accounting, tax compliance, succession planning and strategic planning.

Keywords: Financial Planning

8 Financial
Planning Tips for

Small Business
Owners

Created By : Esperanza Brindle

If you own a business, you know about risk and opportunity. Compared to many people, you’re willing to take mo
re personal and financial risk in order to gain more personal and financial opportunity. It’s a trade-off that can be
highly rewarding.

However, even with a successful business, there’s a good chance that you will experience a lifestyle decline at so
me point in the future. It’s most likely to happen when it’s time to pay for the kids’ university education, when yo
u hit retirement, or because of something unexpected, such as an accident or illness.

It takes financial planning to protect yourself from this risk, but good planning has traditionally been reserved for
the wealthiest of the wealthy.

Distinguish Between Personal and Business Goals

It’s important for small business owners to identify their
short and long-term financial goals. However, the lines
between these objectives can get blurred, and
individuals may compromise planning for their
children’s education or retirement in favor of expanding
their business.

Explore Other Funding Options for Your Business

The most difficult hurdle for many small businesses is
securing funding, and entrepreneurs often turn to their
savings, credit cards, or friends and family for start-up
capital. Financial advisors also urge owners to look for
outside sources, such as a loan or offering equity in
exchange for a good or service. Another often
overlooked way to finance a small business is through
customer pre-sales or subscription services.

Generate Revenue That’s Greater Than Costs

A small business may not be financially viable because
it’s unable to generate enough revenue to cover expenses.
In addition to making a company more profitable, it’s also
essential that owners carefully track and analyze all of
their costs.

Focus on Liquidity

While a company can have a great deal of resources on
paper, it may not be very liquid. Improving cash flow
helps businesses grow, pay their employees, attract
investors, and have available funds in case of an
emergency.

Manage Small Business Taxes

The tax requirements for a small business depend on the
company’s legal structure . Experts recommend that
small business owners utilize a bookkeeping software
and consult with a CPA or tax attorney to better
understand their federal and state tax obligations.

Planning for Retirement

To better align business and personal financial planning,
advisors suggest a company retirement plan. A 401(k)
plan allows for the highest contribution, and company
matching is an excellent way to maintain employee
loyalty.

Arrange an Estate Plan

Creating a will and family trust will ensure that an
individual’s personal and business assets are properly
managed in the event of his or her death.

Establish a Business Succession Plan

If a business owner must leave his or her position within
the company, a business succession plan will enable a
smooth transition in leadership and address many tax
and financial matters.

THANK YOU!


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