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The Top 5 Financial Planning Challenges of Small Business Owners Thumbnail

The Top 5 Financial Planning Challenges of Small Business Owners

By Trent Derrick, CMT®

Having helped a lot of small businesses with their financial planning and being a small business owner myself, I have learned a lot about the challenges my clients face. Although every situation and business is unique, many small business owners have brought up similar concerns. Here are the top 5 most common concerns that business owners have that can be helped through financial planning.


No matter how much you love your business, at the end of the day, it’s your family that you go home to. You work hard because you want to provide for your family, and proper financial planning can ensure that you provide for them even if something happens to you.

Chances are your spouse isn’t involved in the day-to-day running of your business. If something happened to you, would he or she have the knowledge and skills to take over? Probably not. Because of this, you need to prepare another way to support your family financially. Having disability insurance and life insurance can give you peace of mind, knowing that your family will have the finances they need no matter what happens to you. It is also important to have an estate plan in place that preserves everything you’ve built in a tax-efficient manner.  


Your employees can be like a second family for you. They work side-by-side with you every day building your dream. Naturally, you want to work with the best and take good care of them. One popular way to attract and retain talent is by sponsoring a retirement plan. However, retirement plans can be complicated and confusing. Which is best, a SIMPLE IRA or a 401(k) plan? 

A financial advisor can walk you through your options and analyze which is best for your specific company. We can also help you evaluate insurance options, benefits packages, and even compensation structures.


Eventually, you will want to slow down and savor your golden years. How do you know what to do so that one day you’ll be able to afford to?

A financial advisor can help you calculate how much money you will need to retire and come up with a plan to pursue that goal. I can look at whether or not your current retirement plan is sufficient and go over your options for a steady and reliable source of income in retirement. In addition, I often help my clients decide whether or not it is wise to continue investing in their own company and how best to diversify their net worth so that it isn’t all tied up in one place.


Every business owner needs a succession strategy or exit plan. Whether you want to sell or pass it on to family members, a well thought out plan is necessary if you want top dollar and a smooth transition. A knowledgeable financial advisor can provide an objective perspective that is vital to strategizing the optimal plan.

It is important for you to plan when the best time to sell is and what you can do to prepare so that you earn top dollar. Having a strategic transition plan will make your company more appealing to buyers who want assurance that it will continue to thrive without you. 

Even if you’re only passing the business on to family members, you need a plan in place to ensure that it continues to thrive. You also have the added dimension of wanting to make sure all family members are treated equally and the transition doesn’t cause relational discord. 


Finally, if you’re like most people, you don’t want to see all of your hard-earned money going to the government. You want to keep as much of it in your pockets and your family’s pockets as possible. To do so, you need to maximize tax deductions, minimize your taxes both now and in retirement, and have a tax-efficient estate plan in place. You also need to consider the effects of capital gains taxes if you sell your business and what your different options are. 

Taxes are the last thing most busy business owners want to delve into, so that’s where an experienced financial advisor comes in handy. We take classes on tax planning so that you don’t have to. I can help you review your current tax situation and make recommendations for you to save both now and in the future.

You’re Not Alone

It can be hard enough running a business without having to worry about all of the financial planning aspects of it as well. So, why worry about them when you can partner with an experienced professional? If you’d like to learn more about how I can help you take care of your family and employees, and plan for retirement, succession, and taxes, book a consultation with me here or email me at trent@legacywm.com.

About Trent

Trent Derrick is a financial advisor and Chief Market Technician at Legacy Wealth Management. Trent is passionate about the value small businesses bring to their communities and specializes in serving small business owners by providing seamless financial advisory services tailored to their financial needs, including tax planning, cash flow management, retirement planning, and bookkeeping. Trent has a bachelor’s degree from the College of Charleston and studied economics at the University of South Carolina, Columbia. He is a Chartered Market Technician® (CMT®) professional. Trent serves as a guest lecturer for the College of Charleston’s MBA program and acts as chairman of the Market Technician Association’s Charleston chapter. When he’s not working, Trent, a proud Eagle Scout, enjoys volunteering with the Charleston Animal Shelter’s outreach program. Trent and his wife love to cook international cuisines and host dinner parties with their friends. To learn more about Trent, connect with him on LinkedIn.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.