Being a business owner is more than a job, it’s your life. I know how the day-to-day can be all consuming. But we can help you see the big picture and avoid some common mistakes that business owners make. Here are the top 3.
Running a business is time consuming to say the least. I’m a business owner myself, so I understand how easy it is to get wrapped up in day-to-day operations. But oftentimes, that means overlooking the bigger picture – and making some common mistakes.
Here are 3 of the biggest mistakes I see all the time.
Number one is having too much, or possibly all your net worth tied up in your company. We understand that it’s often necessary to invest money back into your business. But if that’s your only investment, it’s like putting all your money in one stock. Great if everything works out like planned, but disastrous is it doesn’t. If you are in this position, you should consider beginning to diversify your investments to give yourself more of a safety net and ensure you are able to achieve the retirement, or work-optional lifestyle you desire.
2. Don’t Know the Value
Second is not knowing the real value of your business. In my experience, many business owners have no idea what their business is worth, and that’s a big problem. If it’s worth a lot less than you think, it could leave you far short of your lifestyle goals when you sell. If it’s a family business and worth far more than you think, estate taxes could create liquidity problems for your heirs that you never thought possible, forcing them to sell part or maybe even all of the business very quickly at a “fire-sale” price just to pay the taxes.
So, we strongly recommend getting a business valuation, to give yourself every opportunity to be sure that you and your family realize the maximum value possible from your investment of blood, sweat, and tears.
3. No Succession Plan
And number three, is not having a succession plan. What happens if you are sidelined by a medical issue for a few months, or longer? Who can you trust to run the business for you, or maybe even buy it if that becomes necessary?
Having trained people ready to step up and take over, can be a huge relief if it becomes necessary to step away – or hand the company over completely. I know it’s not something you want to think about. But thinking about it now is a lot better than dealing with the consequences of it happening without a plan.
We would love to help you achieve the goals you have for yourself, your family, and your business, by avoiding these costly mistakes, and others. Feel free to give us call to schedule an appointment.
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