by Laurie Griffith
At what level are you investing your time, your heart and your money? A rational question all business owners should ask themselves. Yet most don’t. When you start a business, it can become challenging to distinguish between your work and personal life.
Todd Brand, president and CEO of Brand Asset Management Group Inc., understands this question all too well, and for multiple reasons. One, Todd is a business owner and a father of three. And in his line of work, Brand has conversations with many business owners who deal with this dilemma of being “owned” by their business.
His advice: It’s all about balance. As an entrepreneur, you have to give a very high level of attention to your business in order for it to be profitable someday. However, as you invest more in your business, by default you have to give up other things. This can be something very tangible, like your level of monetary investment in the company.
Per Brand: “A question I ask business owners is: How much are they worth? Many will say they have significant wealth. Then I would follow up with another question: What percentage of that worth is not the business? The answer is usually close to zero.”
It is frightening to imagine not having a usable penny to your name. Even more challenging is the risk of losing your business and having nothing to fall back on. Too often, entrepreneurs overinvest their time and money because of their passion for their business, but it can come into conflict with being passionate about their family’s well-being and security.
Luckily, there are steps you can take to protect yourself and your family. For example, diversification and basic estate and succession planning. Everyone should engage in estate and succession planning, but it is even more important for a business owner. As mentioned earlier, a large portion of a business owner’s wealth is most likely tied up in the business. Estate and succession planning allows for a smoother transition if something were to happen to you. This protects not only your family but also the future of your business and its employees.
Another step every business owner should take is annual planning with your CPA. Tax planning sessions should take place early enough in the year to allow time to effectively apply strategies. If you don’t get your CPA involved until after year-end, it is usually too late. In the past, it was difficult to do effective tax planning early in the year because taxpayers were anxiously waiting at year-end for Congress to once again extend certain popular tax breaks. However, laws passed in 2015 will make 2016 year-end planning a little easier. Although business owners should make good business decisions, regardless of the tax implications, not participating in tax planning may result in a higher tax bill that could be avoided. Add this up and over time it can be a game changer.
These are just two actions you can take to make sure you are keeping your family and your future secure. Join us at the next Sharp & On Point Speaker Series on Tuesday, Sept. 20, from 7:30 to 9 a.m. at the Lodge Des Peres, where Brand will share his checklist of 10 wealth management tasks for entrepreneurs that are must-dos. Brand has more than 25 years of experience in wealth, institutional investment and retirement planning. To reserve your seat or for more information, visit www.sharpandonpoint.com or www.lopataflegel.com.
Laurie Griffith is a principal at Lopata, Flegel & Co. Accountants and Management Consultants. The Sharp & On Point Business Advisory Speaker Series is a free event at the Lodge Des Peres sponsored by Lopata. Learn business strategies you can immediately put in place to point your business in the right direction. For more information, visit www.SharpAndOnPoint.com.
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