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27 Reasons Small Business Owners Must Work with a Small Business Financial Specialist

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27 Reasons You Should Work with a Financial SpecialistBusiness Owners Have Common Traits

  1. Business Owners are busy – Your advisor might need to meet you at 7:30 a.m. or 7:30 p.m., have everything prepared ‘signature ready’, catch you between meetings, give you only 1 action item at a time, and explain everything fast.  And just because you don’t call back, doesn’t mean you don’t like your advisor or want to meet.  To successfully work with business owners like you, you’d like an advisor who already learned your needs years ago.
  2. Business Owners want real results, fast.
  3. Most business owners went into business for financial freedom and control over their lives. You’d like an advisor who will give you information, control, and choices.
  4. Most business owners have strong ideas about how they want the world to work.  You speak with focus and no-nonsense.  You work best with others who have had similar experiences, have built businesses, and are also focused. Understand your language. Understand your experience. Understand you.
  5. When it comes to retirement, most business owners like you are so focused on business that you say you’ll always work. Sometimes it’s bravado – usually it’s true.  You’ll do retirement planning anyway because you want maximum control.  That way you’ll have choices about when, where and how hard you’ll work.

    Unique IRS Retirement Planning Rules for Business Owners 

  6. Most business retirement plans can be changed nearly every year to fit the profit, cash flow and tax situation of the business, as long as the business owner starts by September.  Your retirement plan should fit your business and your goals.
  7. For people who have multiple businesses, every business can have its own, separate retirement plan. In some cases, 100% of the money earned can be funneled into retirement accounts, leaving little or no tax consequences.  But the IRS imposes special rules for business owners who own more than one business.
  8. Most business retirement plans must be provided to employees on a nondiscriminatory basis. There are several that provide preferential benefits to you, the owner, (that is, you CAN put away more for yourself than for the employees) but only if your business specialist knows the characteristic details of the owner and the employees AND knows the ways the retirement plans can be manipulated to your advantage.
  9. There are 12 retirement plan types for profit-based businesses and 7 for non-profits.  A Business Financial Specialist is the only person conversant enough to go beyond the 4 most common types: IRA, 401K, SEP, and SIMPLE.  Even these 4 have irregular rules that can be manipulated in the business owner’s favor, if known.
  10. An age-weighted retirement plan may be a possible legal way to give you or your valued employees a preferential retirement plan.
  11. A Solo 401(k) is a self-employed 401(k) that has all the benefits of a corporate 401(k) with little of the corporate expense overhead.  More people qualify than they think.
  12. A Deferred Compensation Plan is another possibility for providing preferential benefits to the owner.
  13. A 412(i) Plan is a way to give the owner advance retirement benefits.
  14. A 419 Plan can provide tax advantaged retirement healthcare benefits.
  15. Annuities are one way to provide preferential retirement plans to reward preferred employees when other plan types have been exhausted—but only when your situation warrants the overhead cost.
    Risk Management for Business Owners
  16. The ‘normal’ rules of emergency funds do not apply to business owners. Given the unpredictability of the business cycle, growth needs, and cash flow, the savvy business owner needs a strategic cash stash.
  17. With preparation, a Roth IRA can be a flexible way to build business and personal emergency funds, have tax-free growth, and save for retirement all at the same time.
  18. In some cases, life insurance can be taken as a business deduction.  Amounts above the normal limits can be taken under specific conditions.
  19. Disability insurance can be tax deductible for the business. If you have employees, it must be provided to them on a nondiscriminatory basis.
  20. LTC can be tax deductible for the business. If provided by the business, you must include employees on a nondiscriminatory basis. Maximum limits apply based on age.Business Continuation Building Blocks 
  21. Some life insurances can be used to help build funds for financing a buy-sell agreement. Other life insurance can provide tax free income at retirement.  Sometimes the same policy can do both.
  22. It’s a little known secret that most second generation businesses fail because the owner failed to disinherit Uncle Sam while attempting to provide for their Son or Daughter.
  23. It is practical for some business owners to save for their children’s college with pretax dollars and then pay for college with tax-free dollars.Bookkeeping Secrets 
  24. There are 422 tax deductions for business owners. Many won’t make it into QuickBooks or get to the accountant because the business owner doesn’t know about them and doesn’t start keeping the appropriate records.
  25. There are benefits that you can give your employees that cost you nothing.  This could allow you to defer giving raises or other more costly benefits.
  26. There are numerous ways to pay yourself from your business that do not involve creating taxable income but are tax deductible to the business.  In some cases, the accountant doesn’t have time to tell you, the business owner, about them.
  27. Every business has some wasted funds. Unfortunately, minor waste is not worth the owner’s time to find and remove. However, a quick yearly analysis can reveal a batch of overlooked areas due for cleanup. When delegated properly, these can yield a steady source of emergency cash funds that will save the day at a later time.
  28. Financial specialists are still a bargain.  So far, they don’t send you a bill every time you call to ask them a question.

 

Posted in Grow Your Business