Effective financial planning for businesses(1)

Effective Financial Planning For Businesses

Business owners are not looking for financial advisors to give them the life they want by making a killing in the stock market; these people have been able to create the life they want by themselves. In the early 1990s, at the beginning of my financial planning career, I was very fortunate to meet one of Canada's most successful businessmen. He was in his late 50s and had much more life experience than me. He shared that 99.9 per cent of the investment advisors he had met over the course of his career did not have the foggiest idea of how to make money nor did they understand what successful business people were looking for when they sought out professional advice. Get to know more detailed info about Best Financial Advisors in India and Financial Planners in Mumbai.

Financial planning is imperative for the success of any business - at every level of operation.

Whether a person is running a lemonade stand or managing the financial department of a Fortune 500 company, sound financial planning can make or break the success of a business.

Unfortunately, a clever motto and a rock solid business plan can only get you so far. If your business goals aren't actually achievable, your company will run out of funding and eventually jobs will be lost and growth will become stagnant.

Successful business people want their financial advisors to show them ways to keep their wealth.

In essence, successful people want their financial advisors to provide them with financial, tax, succession and estate planning holistic solutions. They don't need their advisors to sell them products such as stocks, mutual funds and life insurance to achieve their financial success. The point is they are already successful. Business people are looking for financial professionals who are positioned in the role of wealth manager. Someone who can see and understand the affluent business owner's big-picture needs by constructing customized strategies to achieve their specific goals of wealth preservation, avoidance of unnecessary tax burdens, creditor protection, wealth accumulation and wealth distribution to themselves, their family, estate and charities.

Fundamentally, there are always six keys areas to consider, just like on the personal side. These six areas would include: •

Current Foundation - This covers your debt, cash flow, cash reserves and how you manage your day-to-day business. This is where most new small business owners place most of their attention.

•

Risk Management - Whenever you see the word "risk," just remember that it's a fancy name for insurance. Without going into all of the types, insurance connected to your business is simply to protect everything relevant to your business, from computers and equipment to your actual ability to earn income and cover expenses.

•

Investing - Most people think of small business retirement plans as the only thing that falls under the investing category, but it can also address buying business-owned real estate and taking a laddered approach to organizing cash.

•

Taxes - With taxes, you want to make sure you're taking advantage of all of the deductions, deferrals and depreciation you qualify for, and have a way to track and manage those things so you're not stuck with a grocery bag full of receipts, come tax time!

•

Goal Planning - This starts to overlap with Strategic Planning; the distinction I make between the two is that ongoing financial planning will translate strategy into specific behaviors you perform every day that bring you back to your financial goals, and then monitor progress.

•

Succession Planning - For most people, the idea of transition OUT of their business is VERY far away. Succession planning asks how you plan to finish this business both as planned and in case of emergency.