Last Updated on 1 year by Heyward CPA
Your small business does many things. It supports the community by providing goods and services. It supports the local government by paying taxes and fees. And it supports your employees by providing their livelihoods.
Your business provides for you, too, now and for the future. But don’t count on that just “happening.” You need a plan for using your business to create personal wealth.
Fund a Retirement Plan
Contributing to a retirement plan is a great way to convert money from your business into a personal benefit. Over time, you may be able to accumulate a substantial amount, especially if you contribute the maximum amount. If you don’t have a retirement plan, your financial professional can give you information about the options best suited for small businesses.
Fund Your Exit Strategy
A potentially more lucrative way to convert business wealth into personal wealth is to sell your company. This is a big step and it could take longer than you think, so allow plenty of time. Make sure you have a business valuation done early in the process. That way, if the value isn’t as high as you want (need) it to be, you have time to make necessary changes.
If you don’t have a formal succession plan, create one. If you do have one, make sure it’s kept up to date. A succession plan shows potential buyers that you are committed to having the business survive without you. A buy-sell agreement is a popular way to provide for the transfer of a business. Such agreements are legal contracts that establish who can buy an interest in a company and under what conditions they may do so.
Fund Your Buy-Sell Agreement
Life insurance is a popular way to fund buy-sell agreements. If you’d like to learn more about the role insurance can play in your — and your company’s –future, call your financial professional.
Whether you need individual or business tax advice, give us a call. We’ve got the answers you’re looking for, so don’t wait. Call us today.