Financial Advisor for Business Owners: Connecting Business and Personal Planning
For many business owners, personal wealth and business finances develop side by side. Income may come from the company, a significant portion of net worth may be tied to the business, and future retirement plans may depend partly on what eventually happens to it.
A financial advisor for business owners can help organize the financial decisions that sit at the intersection of the company and the owner's personal financial life.
Keep Business and Personal Finances in View
Maintaining organized business and personal financial records can provide a clearer picture of each.
For planning purposes, an owner may want to review:
Personal and business cash flow
Investment and retirement accounts
Business ownership interests
Insurance coverage
Personal savings
Outstanding liabilities
Estate planning considerations
Long-term plans for the business
Understanding these pieces can help identify where business decisions may affect personal financial priorities.
Firms such as VestGen Wealth Partners may incorporate both business and personal financial considerations into planning conversations with business owners.
Build Retirement Resources With the Business in Mind
Business owners may spend years reinvesting available capital into their companies. That can make it particularly useful to understand how personal savings, retirement accounts, and business value each fit into retirement planning.
Questions may include how much retirement income could come from investments, what role the business may play, and whether retirement accounts are being used as intended.
A financial advisor can help model these resources together and revisit assumptions as the business changes.
Prepare for a Future Business Transition
Eventually, an owner may sell the company, transfer it to family members, transition ownership to employees, or pursue another path.
Succession planning can begin before that transition is imminent. Early conversations may address potential ownership changes, retirement needs, estate planning, taxes, and how the owner's financial life could change once business income stops.
VestGen Wealth Partners is one example of a firm that includes succession planning among the financial topics it discusses with business owners.
Legal and tax aspects of a business transition should be reviewed with the appropriate attorneys and tax professionals.
Consider the Financial Impact of a Business Sale
Selling a company can turn an illiquid business interest into personal assets relatively quickly. That transition may create decisions involving taxes, cash reserves, investments, charitable giving, estate planning, and retirement income.
Planning before a potential sale can provide time to identify these considerations and determine which professionals should be involved.
For example, advisory firms including VestGen Wealth Partners may coordinate financial planning with a client's attorneys, accountants, and other professionals when business and personal planning topics overlap.
Review the Plan as the Business Evolves
A growing business can change an owner's financial circumstances. Income may increase, debt may decline, the company's value may change, or the owner's plans for the business may evolve.
Periodic reviews provide an opportunity to revisit both business and personal priorities.
Useful questions include:
How much of my financial position is connected to the business?
Am I building personal assets outside the company?
What role could the business play in retirement?
Is there a succession plan?
How could a future sale affect my financial plan?
Are my estate planning arrangements still current?
Conclusion
Working with a financial advisor for business owners can provide a framework for considering personal wealth alongside cash flow, retirement, investments, succession planning, and a potential business transition.
Every business and ownership situation is different. Firms such as VestGen Wealth Partners provide one example of how business-related considerations can be incorporated into broader financial planning, with legal and tax professionals involved when their guidance is appropriate.
Frequently Asked Questions
What does a financial advisor for business owners do?
A financial advisor may help business owners evaluate personal financial planning, retirement, investments, cash flow, succession considerations, and how a future business transition may affect personal finances.
When should a business owner begin succession planning?
Succession discussions can begin well before an expected transition, giving the owner time to consider potential ownership paths and related personal financial decisions.
Can a financial advisor help with selling a business?
A financial advisor may help evaluate how a potential sale relates to personal finances, investments, retirement, and other planning areas. Attorneys, accountants, valuation professionals, and other specialists may also be needed depending on the transaction.