3 things small business owners should consider

As a small business owner (FFG), I understand the overwhelming amount of questions that need to be answered and I also know about how many go unanswered due to pure lack of time. I have a unique perspective as a wealth management advisor, because I do not just think about marketing, sales, operations, etc., but I'm also thinking about the ways that we help other business such as succession planning, spending, and retirement plans.

This blog post serves to get the brain juices flowing. I hope this helps you as a current small business owner or future small business owner have a useful reflection on important ideas regarding your business. Here are three questions to ask yourself:

1.) If you are just starting up: are you overspending?

Many new entrepreneurs fall into the trap of spending way too much. I actually fell into this trap with my first business. I started a CBD company out of college and spent so much money on packaging, labels, logo, and websites. All you need is a minimum viable product when starting out or less. The goal should really be to see if the market is even interested. Ways to save money when starting up:

• Create your own website on Wix, Shopify, or Squarespace to start, there is no need to spend multiple thousand on a website when you aren't even sure what story your brand should tell

• Create a Facebook or google ad to see if anybody is actually interested in the product

• If your product prototype needs research and development, don't cash out your 401k.. try a crowd funding campaign such as Kickstarter or GoFundMe

2.) If your business has enough revenue to support you: are you saving for retirement?

401k type retirement plans are not only for the benefit of W-2 employees, they are actually for small business owners too. Even if your revenue is inconsistent or your business is just a side hustle. You can use a retirement plan to reduce your taxable income and to save for retirement in a tax-advantaged account.

Also, if you are planning to hire employees consider other benefits as well such as life insurance, disability insurance, and health insurance. In this competitive labor market, these benefits can no longer be optional, employees expect them as the bare minimum.

This Graphic shows a decision matrix for two very common retirement plans used by small business owners.

3.) If you are 10+ years from retirement: how will you utilize your business for retirement?

So you've successfully built a beast of a business. Now what? Does your child want to take it over? If so, have you considered how this could fit into the estate plan for your other children? Do you want to sell it? Do you have any buyers in mind? Do you have key employees that might want to purchase it from you? Do you even know how much it is worth? You can see how the questions build up quickly when it comes to succession planning, and it becomes evident that this is not something you should put off until the last minute.