In the rush of day-to-day business activities, many small business owners may lose sight of what they had originally hoped to accomplish. As a business grows, personal objectives often change.
Personal goals and priorities should be constantly reevaluated. The following areas should be diligently monitored by most small business owners:
Strengthening Personal Finances and Building Wealth
Many business owners become so engrossed in running their companies that they inadvertently end up putting their personal finances on the back burner. This may occur if most of their liquid assets are tied up in the business. However, to achieve financial independence and build personal wealth, it is important to make personal savings a priority. By conducting regular financial reviews, and taking follow-up action as needed, you can help develop and strengthen your personal financial position.
Preparing for Retirement
Many tax-deferred, qualified retirement savings vehicles, such as simplified employee pension plans (SEPs) or 401(k) plans, are available to business owners and their employees. The size of a company, as well as the ages and salaries of its employees, often determines which type of retirement plan is best in a given situation. In addition, nonqualified plans allow business owners to provide selective benefits for themselves, as well as their key employees.
Developing an Exit Strategy
Will your small business be marketable if and when you decide to sell? It is important to develop an “exit” strategy that can help provide cash commensurate with the value of your business in the event you choose—or are forced (due to death or disability)—to divest.
Retaining the Company within Your Family Your company, like many others, may be a closely-held business, operated by more than one family member. If you wish to keep your company in your family, it is important to learn about transfer tax issues and develop a business succession plan that will help secure your long-term goals and objectives.
As your company grows and develops, it is important to keep sight of your personal priorities, particularly as they change over time. Annual reviews can help ensure your business activities are consistent with your long-term personal goals and objectives.
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