Business Strategies

Business owners often put everything they have into the company and neglect their own finances. But your personal financial health and your business are tightly linked. A few steady habits can protect both.

Separate Business and Personal Money

Use different bank accounts and credit cards for each. Pay yourself in a regular, planned way, through salary or owner draws depending on your entity type, rather than dipping into the business account whenever you need cash. This keeps your books clean and your liability protections intact.

Build an Emergency Reserve

Business income can be uneven. Hold personal savings to cover several months of living costs, and keep a separate cushion in the business for slow periods. Many owners are tempted to rely on credit or personal loans in a crunch, which puts home and savings at risk.

Be Careful With Personal Guarantees

Business loans and leases often require you to guarantee payment personally. Understand what you are signing and what assets are exposed, and limit guarantees when you can.

Plan for Your Own Retirement

You may not have an employer plan, and you may be tempted to treat the business as your retirement fund. That is a concentrated risk. Contribute regularly to a retirement plan designed for business owners, and diversify beyond the company. See our article on retirement plan options for small businesses.

Protect What You Have

• Insurance: liability, property, disability and life coverage. Disability insurance matters because you are the business's most important asset.
• Health coverage: compare options at healthcare.gov.
• Key person and buy-sell coverage: funds a transition if an owner dies or cannot work.

Control Taxes

Pay estimated taxes on schedule, set aside money for them as income comes in and meet with your CPA during the year to project your liability. Our tax planning services help with this.

Set Goals and Review Them

• When do you want to retire or step back?
• What income do you want from the business?
• What do you want to happen to the business afterward?

Write the answers down and revisit them annually.

Do Your Estate Planning

A will, powers of attorney, beneficiary designations and an owner agreement make sure your wishes are followed and your family is protected. Keep them current as the business changes.

Use Your Advisory Team

A CPA, attorney, insurance agent and financial planner who talk to each other can catch issues no single advisor sees. Schedule regular check-ins rather than waiting for a problem.

If you want a second set of eyes on your personal and business finances together, get in touch with our office.