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Interview Patty

5 Important Strategies for Small Business Owners

Houston Financial Strategies for Small Business

Planning is not easy. It takes time, effort and money away from what is most urgent today in order to plan for the important things tomorrow.

Implementing these 5 ideas will create both value and peace of mind and will yield many dividends for yourself, your family and your business.

1. Create Wealth Outside the Business. - Most business owners have a large portion of their wealth tied up in the business. Often, loans are taken against other personal assets to start or expand the business. So if something happens to the business, it can be financially devastating.

2. Protect Your Loved Ones. - A corollary to protecting your assets is to protect your loved ones. If something happens to you, what would your family end up with? Without proper planning, the business often ends with the death of the owner. The family may also be saddled with debts that will come due when the owner passes away. Insurance is a cost effective way to provide money to your family when they need it the most.

3. Hire a Board of Directors. - The purpose of a board of directors is to help the business owner create business value.They can help set the long term direction of the business as well as work on current challenges facing the business. Identify the areas where you are most in need of assistance (financial, operations, marketing, etc.) and then search for candidates with high level expertise in that area.

4. Develop an Exit Strategy. - Every business owner leaves the business someday. Whether they sell the business, pass it on, close it down or die in the saddle, everyone exits at some point. Developing an exit strategy allows you to leave on your own terms. Whether your choice is to sell it to someone else or to pass it on to a family member or key employee, the path to preparation is very similar. You have to create systems, develop procedures and train a successor. The objective is counter-intuitive for most business owners, to build your business to a point that it can run without you. Doing this creates value that can be sold or passed on. Even after creating wealth outside the business, the business still represents the largest asset of many successful business owners. An exit strategy is critical to building and ultimately unlocking the value embedded in your business.

5. Design Your Estate Plan. - As a business owner, you have poured your “blood, sweat and tears” into building your business and other assets that you have accumulated along the way. An estate plan is how you ensure that those assets are passed on to your loved ones in the most cost effective way possible. Your estate planning attorney will draft the documents and help you create a cohesive plan. However, the starting point of any plan is to gather all the information and ensure that those who need it can access it when necessary. This includes cataloguing all assets, liabilities, key contacts, legal and financial documents, employee benefits, etc. Organizing these is an important first step. A well designed estate plan ensures that your assets go to the right people, including ownership of the business. It is important to determine who is best capable of running the business if you are not around and then make sure that they would have the authority to do that. 

Source: Tri-CircleFinancialStrategies

Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.

 

Houston Financial Strategies for Small Business.

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