Peter Klein, in a recent article in the Financial Advisor discusses how business owners face distinctive challenges in relation to operating their business and personal expenses.
Seven challenges he addresses are:
- Business owners underestimate their personal exposure to business risk. The risks of business ownership are ever-changing. Owners need to make it a priority to protect their personal assets, especially when dealing with bank loans.
- Business owners double down on market risk.
Business owners tend to reinvest their money in what they know, rather than countercyclical assets. - Business owners loot their retirement funds to save their businesses.
Owners tend to be too hopeful about an economic turnaround. And, if their business is failing, using a retirement fund to save the business makes little to no sense, especially when the fund has special protection. - Business owners focus on control.
The tendency to not want to turn business control over to an expert happens many times with business owners. However, turning over control allows for an experienced professional to help overcome barriers the business is facing. - Business owners often fail to consult with financial professionals to gain a broader perspective.
Owners may not be aware of market and economy changes like a financial professional. - Business owners often do not regard taxes, succession and estate planning, which are especially important issues to Baby Boomers.
Generational transfers are on the rise, and it is important for owners to be aware of tax, succession, and estate planning challenges. - Business owners often lack awareness about special benefits.
Business owners and self-employed individuals have tax-deferred savings opportunities that they may be unaware of.
For more information on these challenges, please read the full article. For assistance in overcoming some of these challenges, please contact Patrick Mutchler at (231) 726-5870 or pmutchler@brickleydelong.com.