Where Entrepreneurs Go Wrong in Their Own Wealth Planning

Benjamin Haas |

Business Owners 4 of 6



Most successful business owners frequently ignore their own wealth planning. I know two common reasons why:

  • Time - It may feel like it already takes 24/7 dedication to keep moving the business forward let alone just ensure the day to day needs are met. We don’t have the time to do our own planning.
  • Euphoria  - When income exceeds needs and the business is thriving, it can become very easy to continue to invest in the one thing we trust to make us more money; our business, ourselves.

But this type of alter ego, where the business begins to define us, can lead to bigger problems in our own wealth planning down the road if we don’t diversify our assets. Here are five common missteps in our own wealth planning, which if avoided, can provide for a more well-balanced financial plan.

  1. Cash flow and debt management – Investments for “business growth” frequently cause an imbalance to your assets, liabilities and cash flow.  Many entrepreneurs also fail to recognize the consequences of personally guaranteeing business debt.  It could reduce your borrowing access or reduce your score. So investing in more equipment/inventory/employees will not help your ability to access financing for a home or education in the future.


  1. Lopsided balance sheets – It’s common for one’s business asset to be the largest on their personal balance sheet.  But just like you wouldn’t invest retirement funds in only one company, your company shouldn’t be your only investment. You need to take capital from the business and diversify in other investments generally segregated from the business.


  1. No plan to get out – Most owners fail to have a succession plan that defines how and when they will exit the business and who will fill the owner’s shoes. If you consider your business your retirement plan, you better know how and when you will monetize that through sale or succession. This requires doing regular business valuations.


  1. Work-life balance is off – You didn’t start your business so you could work 14 hours a day, 7 days a week. The secret to balance could be grooming an employee, delegating tasks and getting paid help. Results could be healthier living, greater mental health and less stress, and increased value. It’s no secret that sole owner and sole proprietor businesses are not valued as highly for fear that the business is too dependent on the work and health of one individual.


  1. No comprehensive financial plan – There are often benefits to having an employer, such as healthcare, life and disability insurance and a retirement plan. This makes for a good start to personal financial planning. But just because you get to call the shots as business owner doesn’t mean you should ignore these “benefits” for yourself. Make sure they aren’t forgotten.

For all the effort, blood, sweat and tears you put into your business, don’t forget to make sure the business is working hard for you too. That means rewarding your own balance sheet along the way, and keeping your personal financial goals in your sights too. The easiest way to avoid these missteps is to hire an experienced financial head coach, who can help you weigh big decisions and keep balance between continued investment in your business, and the necessary investments in yourself. We can help.


Securities offered through LPL Financial, Member FINRA and SIPC. Investment advice offered through U.S. Financial Advisors, a registered investment advisor. U.S. Financial Advisors and Haas Financial Group are separate entities from LPL Financial.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.


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