Business Planning – 5 Ways to Flub a Small Business Plan
Owners of small businesse plan face some of the biggest retirement planning challenges because they are on their own to figure out the details.
The most common mistake owners of small businesses make is failing to have a retirement plan at all. “They leave their spouse with basically nothing,” says Joe Franklin, president of Franklin Wealth Management, whose Chattanooga, Tennessee-based company focuses on working with small businesses.
Franklin says small business plan owners make five other major mistakes when they are approaching retirement.
- A loosey-goosey succession plan. Unless it is a solid, well-built structure that takes into account financing for the buyer of the business and enough money to support dependents, including a widowed spouse, with underpinnings of disability and life insurance, chances are good that passing along the business will fall apart.
- Getting a late start. Putting off making a plan until you are in your 60s probably won’t give you enough time. “Do it in your 50’s even if you plan to keep working into your 70’s,” Franklin advises.
- Ignoring taxes. If you don’t have a way to pay capital gains and inheritance taxes, Uncle Sam will derail the best-laid plans.
- Making people feel mistreated. It’s especially important to compensate the grown children who won’t inherit the business. “You have to spell it all out ahead of time and make sure you’re fair,” Franklin says. Otherwise, jealousy can lead to expensive lawsuits and other financially destructive problems. Small Business Plan will be useful.
- Failing to accumulate a nest egg. Once you hit retirement age, nothing beats a healthy savings account.
Reference: Bankrate.com by Jennie L. Phipps, October 27, 2014
Filed Under: Business Planning; Retirement Planning
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