In honor of National Small Business Week, we were joined by our host Mark Perkell, Esq., who specializes in working with small business owners; he’ll share with us information on different entity options, the pros & cons for each, and why changing from one entity to another might make sense (and what the process would be).
There’s a myth out there that most owners of small businesses and startups are younger people. In fact, the opposite is true: Most business owners are age 55 and over.
That reality can turn what are usually the peak earning and retirement savings years from your late 40s to late 50s into something more akin to watching " The Perils of Pauline." But it doesn’t have to be that way. Let’s look at how to avoid common perils and chart your course to the retirement you want while continuing to concentrate on the ongoing needs of your small business.
In 2020, the pandemic presented many small business owners with a crash course on financial metrics and why they matter. You may be one. I imagine you’ve owned your business for a few years or more, endured some ups and downs but overall enjoyed steady growth, watched your cash flow and know your bottom line. Why was selecting, applying for, and tracking small business relief funds such a challenge? Let’s start by taking a close look at the factors creating the challenge and how to prepare your business with metrics that matter for the future.
Just about anyone can start a business.
Get an idea. Fill out some forms. Register with the necessary local and state agencies. Tell the world about your fantastic new service or product.
But following your dreams is never easy — it’s hard work, fear of failure, loneliness, and mistakes. Running a successful business over time takes a lot more than starting up. And running a successful business without undermining your personal life and finances is an entirely different story.
Buying or starting a business used to be unusual if you were considering a second career. But encore careers as a business owner become more popular each year despite the wide-spread perception of risk. Let's explore what is driving the trend and your options for transitioning in a way that can help safeguard your business dream and your financial well-being.
You have probably seen the articles. Some are long. Some are short. The common thread is that the writer claims there is one perfect and absolute set of questions to ask (and corresponding answers) whenever you interview a potential financial advisor. I don’t think so.
Whether you are a member of the baby-boom generation born between 1946 and 1964, or a member of the generations of younger people that follow, you may be surprised to learn boomers are as likely to buy a business as to sell one.
Back in second grade, it didn’t really matter much if you failed to make a decision. If one of your parents called out into the back yard to ask if you wanted a PB&J or grilled cheese sandwich for lunch and you were intent on climbing the tree and didn’t answer, you suffered no lasting harm from being served your second choice lunch option that day. But things are different now that you’re a business owner.
There are times when imagining the worst-case scenario helps you prepare most effectively for the best case. The transition of a family or closely-held business is one of those times.
Ask yourself, why is it that while Harvard Business School reports at least half of all companies in the US are family businesses - and just over half of all publicly listed companies in the US are family owned - that the most-cited family business statistic is from John Ward’s seminal study finding only 30% of firms survive through the second generation, 13% survive the third generation, and only 3% survive beyond that?
The Family Business Institute identifies a major cause as the failure to imagine and plan for worst-case situations that could dramatically affect not only ownership succession, but management succession planning and leadership development as well.
Businesses start with the best of intentions. While beginnings are an exciting time, a strong business foundation needs to include planning for multiple future scenarios and potential “what-ifs,” including business transition and succession. Unfortunately, many business owners don’t plan for their end game.
