Top 10 Financial Planning Tips for Business Owners

The life of a business owner is a long and crowded road. Required activities, such as developing customer relationships, handling employee issues and managing cash flow, are time-consuming tasks, but necessary to keep the operation running smoothly.

Unfortunately, business owners often neglect their personal financial goals. It’s more common for owners to put off planning for their financial future until later in life, when “things settle down” or there is more clarity about what the business can reasonably achieve.

Today’s Business Owners Need to Consider Their Tomorrows

The business owner must play numerous roles within the company to keep everything afloat. He or she often has well-defined goals and big dreams for the business, but is inundated with an endless list of tasks and limited time to accomplish them all. Lack of time often causes business owners to fall prey to two outcomes:

– They fail to create a defined plan for their own financial future. It’s risky for business owners to make decisions on their own without sufficient information or analysis, and they often regret these decisions down the road; or

– Sometimes, they don’t take action at all and miss out on business opportunities they typically wouldn’t dream of passing up.

10 financial planning tips for business owners

Prioritization of 10 key issues can be helpful:

1. Managing Cash and Debt Levels

These tasks are of the utmost importance for “young businesses” that are just getting off the ground. External demands on a business owner’s financing situation are endless, so it is critical to monitor expenses and conserve dollars to finance the operation.

2. Paying Yourself

Business owners often pay themselves very little in the way of salary — partially due to the reasons I mentioned above, and also due to the need to minimize personal payroll and income taxes. While these actions can be a big help at tax time, they can be roadblocks to helping business owners accumulate savings for retirement or other goals.

3. Personal Goals

As a business owner, you should make an effort to establish your personal goals in the same way you put together multi-year business plans. Starting a conversation with family members or advisors is a great start. Tools and apps exist to help articulate goals once you have a better idea of what you want. Also, a critical step is to determine what is “reasonably possible” for you to achieve, given your financial circumstances.

4. Planning for Retirement

Take some time to determine how much money it will take to fund your retirement or second-career dreams. Tracking or paying close attention to “personal” expenses, as opposed to business expenses, can be accomplished with the help of online tools or a good old-fashioned spreadsheet.

5. Saving for Retirement

Similar to a 401(k) plan, set up regular automated payments to your savings to accumulate enough money to fund your personal hopes and dreams. To some extent, it’s okay if this saving takes place in spurts; however, you should aim to set aside a certain amount each year. Of course, the hopes and dreams of many business owners include the potential of selling their business to fund their own relaxation and recreation during retirement. However, this is a huge unknown for most businesses, and dreaming of a big payoff from the sale of a business may not be realistic for everyone.

6. Diversifying Your Assets

As you save and invest money for the future, ensure that it is properly diversified and compatible with the amount of risk you are willing to bear. Don’t fall prey to “market timing.” Determine an investment policy and execute it in a disciplined way; then, spend most of your time and effort on managing your business.

7. Managing Risk

Beyond their monetary investments, it’s essential for business owners to establish protection for their families. Life insurance and buy-sell agreements, which deal with the buyout of a deceased partner of the business, can safeguard your survivors in the event of your death. Also, disability insurance may be advisable.

8. Planning for Succession

It’s important to keep the issue of succession planning in mind. Getting the most out of your business or real estate investment later on can help guide your personal wealth management decisions after you’ve left the helm.

9. Arranging Your Estate

Regardless of age, business owners should meet with a qualified attorney and estate-planning specialist to ensure that their goals and wishes are properly accounted for, including plans for business assets. Younger business owners don’t always feel that estate planning is necessary; but failing to make a plan could put their business and family at risk. At a minimum, business owners should have an updated will that contains instructions on how their assets should be distributed, which may or may not include business assets.

10. Choosing a Financial Advisor or Financial Planner

Most business owners would benefit from the guidance and assistance of an appropriate advisor. However, it’s important to ask the following questions:

– Is he or she an expert in wealth management, as it relates to business owners?

– Does the advisor have a fiduciary responsibility to put their clients first, with no compensatory conflicts of interest?

Financial advisors are not created equal; some aren’t held to a fiduciary standard of care. Registered investment advisors (RIAs) comply with the standards listed above, and are regulated by the Securities and Exchange Commission (SEC) or their state. For more information, consult the Financial Planning Association (FPA)’s website.

With some luck and a lot of hard work, you can overcome challenges within your business and take steps toward future growth. But don’t forget to get on track — and stay on track — to achieving your personal financial goals.

Want a second opinion on your personal financial plan? Speak to a member of our advisory team.


Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Nate Wenner

CPA, PFS, CFP®, CIMA® | Principal, Senior Financial Advisor

Nate Wenner, CPA, PFS, CFP®, CIMA®, is a Principal and Senior Financial Advisor with Wipfli Financial Advisors in Minneapolis, MN. Nate specializes in financial planning for high-net-worth individuals and small businesses, focusing on retirement distribution planning, estate planning and business succession planning.

No Comments Yet

Comments are closed

Top 10 Financial Planning Tips for Business Owners

time to read: 4 min