As an owner, do you ever think about how your business would survive an economic downturn? Many business owners we talk with are concerned about five economic issues that are beyond their control:
With many financial experts discussing the potential for a recession in 2024, along with economic uncertainties that may arise from a heavily contested Presidential election, now is the time to plan for these contingencies. It may be too late if you wait until these uncertainties become realities.
This is where Greenville Fiduciary Investment Advisors can assist you, bringing a unique blend of financial planning expertise that can make a difference for your personal and business needs.
In this blog, we’ll share our thoughts on five financial planning tactics you can take now to be better prepared for any market uncertainty that may present itself in the coming year.
"The secret of getting ahead is getting started." ~ Mark Twain
As a business owner, you must be flexible and adaptable enough to handle unpredictability, especially when making financial decisions. Ensuring your portfolio is well diversified is one of the key elements in handling unpredictability.
Your primary asset is the business itself. Then there are your investments. Expanding your investment portfolio to include additional asset classes, economic sectors, and geographical boundaries can serve as a counterbalance to market uncertainties. As the old saying goes, “Don’t put all your eggs in one basket.”
Investments in real estate, bonds, and stocks from diverse industries—technology and healthcare—can create a financial buffer. The reasoning is straightforward: industries can react differently to the same economic event. A healthcare stock might remain stable or even appreciate when consumer discretionary stocks fall.
For entrepreneurs like yourself, integrating this multi-tiered approach into your financial plan can reduce the impact of a bad investment on a significant percentage of your assets.
As interest rates rise, as a business owner, your cost of capital may require a new strategy. Current debt may get more expensive, and new debt will be more expensive. Ideally, you have enough cash on hand to manage the operations of your business.
Check with the experts. It starts with a comprehensive financial plan custom-tailored to your specific business. For entrepreneurs in Greenville, partnering with a CERTIFIED FINANCIAL PLANNER™ (CFP®) can be a strategic move to combat liquidity concerns when interest rates are rising.
One important step is to evaluate your current liquidity ratio—how much ready cash or easy-to-convert assets do you hold against your current liabilities? A CFP® in Greenville can assist in analyzing this critical indicator to ensure your business isn't caught off-guard by unforeseen expenses or downturns.
Also, reassess your credit options. Establish lines of credit before you're in dire need. In unstable markets, those pre-secured financial lifelines can be invaluable for managing short-term obligations without sacrificing the long-term integrity of your business.
A forward-looking cash flow projection, developed with the expertise of a Greenville CFP®, can give you a clearer view of potential financial pain points, allowing you to plan and act preemptively.
Watch our video: “ CDs-Not for Long-Term Money”
Another consideration you should include in your financial planning process for your business is taxes. Each year, we see new tax laws implemented or changed that can have a significant impact on your business.
You can provide competitive employee benefits without straining your financial resources. Following are five strategies to pursue this while also considering more sophisticated tax planning solutions.
At Global View, we understand the pressures of running a business. We also have a business to run, and planning for both the expected and unexpected is crucial to your business’s success and ours.
When managing substantial wealth, the focus often shifts from accumulating assets to preserving what you have with a certain amount of growth. At this stage, it is not about chasing the highest returns; instead, it's about leveraging every available advantage to boost your returns while controlling risk exposure.
Tax considerations are also a critical component in this equation. While it's said there's no such thing as a free lunch, optimizing the tax efficiency of your investments is the easiest way to improve your net, after-tax returns.
In addition, as a business owner, estate planning is a cornerstone of comprehensive wealth management. The aim here is twofold: firstly, to maximize the inheritance for your beneficiaries by minimizing the tax bite, and secondly, to remove any guesswork or conflicts they may experience when the time comes.
If you’re ready to get serious about financial planning for business owners, connect with us today.