How Business Owners Can Work Smarter, Not Harder

When you’re a business owner, your relationship with money can be complex.

On one hand, entrepreneurial-spirited business owners know all about expanding, growth and, well, how to make money. However, many business owners get so caught up in making revenue expansion their primary goal that they often forget about their personal finances and the idea of actually retiring themselves one day. They forget one of the golden rules of being an entrepreneur: The “work smarter, not harder” rule.

At Foran Financial Group, we work with a lot of small business owners, and many are surprised to know that there are steps that they could be taking right now that would help protect and increase their business revenue without having to land a new client or increase sales. It starts with financial planning.

Financial planning is something many business owners know is important, but they often feel they just don’t have the extra time to attend to it. We get it – you’re busy growing your businesses! But the truth is, financial planning, especially for business owners, is too important to put on the backburner. If you need help putting together a comprehensive plan, the right financial advisor can be the key.

There are many ways financial planning can assist business owners and protect the long-term growth of their business.

 

Financial planning for business owners can be complex. Contact Foran Financial Group to see how we can help.

 

Plan for Quality

Any business owner knows that finding the “right” talent can be a full-time job in itself. But one of the most significant letdowns can come after hours of job postings, interviewing and screening candidates when you find out that none are qualified, or at least to your standards. Offering retirement plans to employees can be a great way to attract quality talent.

In the past, business owners have been wary of this, but what was once a fear factor for business owners has stabilized over the years due to government regulations, laws and compliance. The U.S. government recently passed tax legislation that encourages and accommodates business owners to offer retirement plans.

401(k) Made Possible

The SECURE Act, a retirement legislation bill passed in 2019, now allows Open Multiple Employer Plans (MEPs). MEPs are an option that now more so than ever allows small businesses to band together under a single retirement plan. This makes it possible for small businesses to be flexible and offer their employees a retirement plan. Instead of one Traditional 401(k) per company, with MEPs, multiple small businesses are umbrellaed under one 401(k), which can save an employer costs and risks. Offering a retirement plan can also instantly make your company more marketable.

Vesting

Another great benefit for both employees and employers is an Employee Stock Option Plan (ESOP). ESOPs are a strategic and lucrative method to increase revenue and employee satisfaction. By offering an ESOP, employees become investors in the company.

Studies have shown that once employees begin to participate in an ESOP, their contribution toward the company increases through many forms. Their mindset changes from “just a worker” to an owner mindset. ESOPs allow employees to technically own a portion of the business, and as the old saying goes, no one cares for your company like you do. That saying now holds true for you both.

At the same time, the more employees participate in the company, the more your company grows in revenue and stability.

Other Benefits

Not all benefits have to come in the form of a retirement plan. With the help of a financial advisor who specializes in helping employers, you can get creative, because owning a business is not a one-size-fits-all category.

For example, some employees may value their paid time off, or even the ability to work remotely. Many of the country’s top companies offer the flexibility to work from home for a few days out of the week, provide lunch for their employees on certain occasions, encourage employee shadowing of different departments or senior leaders, etc. Depending on the size of your company, this may be something you can provide. If possible, discuss your ideas with your employees first to get personalized feedback on their goals and desires. Then talk with a financial advisor to see if it’s financially possible.

Protecting Yourself

Owning a business comes with risks. With that said, it’s important to take every step and measure to protect yourself along with your business. No one benefits if you or your business aren’t functioning at its maximal capability.

If financial planning isn’t your forte, and you’re not able to spend the time needed to stay on top of new estate planning rules, tax laws, market fluctuations and investment opportunities on your own, find someone who does. A financial advisor can be a great resource to have on your team, but remember, not all financial advisors are the same.

As a business owner, you aim to provide your employees and clients with exceptional professional service – and you deserve the same. So, when searching for a financial advisor to work with, here are a few characteristics to look for:

  • A fiduciary standard of care – As a fiduciary, your financial advisor has a legal responsibility to put your best interests first. A fiduciary cannot offer advice simply because of a commission, kickbacks or quotas. This may seem like it would be the overall standard, but it is not. Foran Financial Group follows this standard of care.
  • An understanding of the area in which you live and operate your business – Financial planning in New Jersey, for example, is different than in other areas. There are different laws, regulations and benefits. Working with a financial advisor who understands your environment can be a huge benefit.
  • A focus on helping business owners – Not all financial advisors work with employers and have the insight you may need. At Foran Financial Group, we know that not one small business is the same. The more tailored advice and planning a financial advisor can offer, the better it is for you.

The Takeaway

Financial planning for business owners can be complex. Your relationship with money can be emotional. Your financial needs can be complicated. But remember, just because you’re the employer, you don’t have to work hard to solve every problem on your own. By incorporating a professional financial advisor to help grow your business, you can leverage their knowledge and experience. And that’s the true definition of working smart.

If you’re looking to work with a fiduciary financial advisor in New Jersey, contact Foran Financial Group and get the conversation started.

Foran Financial Group has a combined 58 years of experience helping families with their financial plans.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the advisor, and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Past performance may not be indicative of future results.