ARTICLE
Ashley Troutman, Financial Advisor Northwestern Mutual Every business grows through stages. The typical stages of business growth are start-up, growth, maturity, and transfer. No matter which stages your business is in sound financial management of the business starts with assembling a team of professionals; accountant, attorney, banker, and financial/business advisor. Your professional team will help you manage four critical areas of your business; risk management, employee benefits, exit planning, and personal financial planning for you the business owner. Often these professionals on your team are business owners themselves so they can relate to the emotions that are felt and questions that come up throughout your day. Let’s consider those four critical areas. No different than when you began your business successful financial management of your business begins with a plan that begins with the end in mind. Here you must identify and prioritize the goals of your business. From there we want to work to protect what has been envisioned and built by establishing or reviewing liability coverage for your business and protecting the business from the loss of owners and key employees. By taking this step you are taking into consideration your physical assets, intellectual assets, and your human capital (your employees). Next, we want to establish or enhance group employee benefits, retirement solutions, and benefits for select key employees. Again, this is considering the human capital (employees) of your business. Without happy people it becomes harder to scale. However, not only is there a profit motive for doing this, but its also the right thing to do and allows a business to remain competitive in a marketplace that is increasingly more difficult to fill roles on the team. The third area we want to consider in the financial management of your business is exit planning. How do you plan to leave your business? Even in the start-up phase taking this into consideration is helpful to ensure a successful ending. Here you want to think about when you want to leave the business, who will be your successor, what’s the value of the business? Establishing or reviewing buy sell agreements and keeping good profit and loss statements for business valuation is essential. The fourth area is the personal financial planning of the business owner. Many business owners forsake the financial health of their family for the business, but these are interconnected as the business impacts the personal side. It is important to review the risks that you face that could impact the family’s financial wellbeing. What happens if you pass unexpectedly, what happens if you become disabled due to sickness or injury, will your business fund your retirement? All important questions to ask yourself. I highly recommend that you work with a trusted financial/business advisor. This professional can ask you challenging and thought-provoking questions, develop an understanding of your business and industry, and a central figure that can work collaboratively with you and your other team of professionals (CPA, Banker, Attorney, etc.). Doing so protects your reputation and good will of you and your business.
Ashley Troutman, Financial Advisor Northwestern Mutual
Every business grows through stages. The typical stages of business growth are start-up, growth, maturity, and transfer. No matter which stages your business is in sound financial management of the business starts with assembling a team of professionals; accountant, attorney, banker, and financial/business advisor. Your professional team will help you manage four critical areas of your business; risk management, employee benefits, exit planning, and personal financial planning for you the business owner. Often these professionals on your team are business owners themselves so they can relate to the emotions that are felt and questions that come up throughout your day. Let’s consider those four critical areas.
No different than when you began your business successful financial management of your business begins with a plan that begins with the end in mind. Here you must identify and prioritize the goals of your business. From there we want to work to protect what has been envisioned and built by establishing or reviewing liability coverage for your business and protecting the business from the loss of owners and key employees. By taking this step you are taking into consideration your physical assets, intellectual assets, and your human capital (your employees).
Next, we want to establish or enhance group employee benefits, retirement solutions, and benefits for select key employees. Again, this is considering the human capital (employees) of your business. Without happy people it becomes harder to scale. However, not only is there a profit motive for doing this, but its also the right thing to do and allows a business to remain competitive in a marketplace that is increasingly more difficult to fill roles on the team.
The third area we want to consider in the financial management of your business is exit planning. How do you plan to leave your business? Even in the start-up phase taking this into consideration is helpful to ensure a successful ending. Here you want to think about when you want to leave the business, who will be your successor, what’s the value of the business? Establishing or reviewing buy sell agreements and keeping good profit and loss statements for business valuation is essential.
The fourth area is the personal financial planning of the business owner. Many business owners forsake the financial health of their family for the business, but these are interconnected as the business impacts the personal side. It is important to review the risks that you face that could impact the family’s financial wellbeing. What happens if you pass unexpectedly, what happens if you become disabled due to sickness or injury, will your business fund your retirement? All important questions to ask yourself.
I highly recommend that you work with a trusted financial/business advisor. This professional can ask you challenging and thought-provoking questions, develop an understanding of your business and industry, and a central figure that can work collaboratively with you and your other team of professionals (CPA, Banker, Attorney, etc.). Doing so protects your reputation and good will of you and your business.