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ICYMI | Financial Planning for Small Business Owners

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Transition & Succession

On Dec. 1, Jeremy Mocek, APMA, from Academy Capital Management shared with our attendees an overview of the different areas of financial planning that small business owners can benefit from. Mocek focused primarily on retirement, investments, and insurance. Below is a recap of the workshop that was held at 25N Coworking:

Academy Capital Investment (ACM) is one of the largest independent investment firms in the Waco area and has been around since 1987. ACM focuses on matching their clients financial resources to their business commitments through investment management and financial planning.

ACM luncheon1
ACM luncheon2
ACM luncheon3
ACM luncheon4
Retirement Planning

Mocek explained to us just how important it is to find the right retirement plan that saves both you and your employees money. When looking at a retirement plan it is important to consider the number of employees, age, compensation, cost of implementation, and the overall saving goals of the owner. Highlighted below are the retirement plan options discussed:

Retirement Plan Options: Business with Employees

  • 401(k) Plan
    • Max. contrib. = $20,500 (50+ = $27,000)
  • Profit Sharing Plan
  • SIMPLE IRA

Retirement Plan Options: Self-Employed

  • Traditional IRA
  • Roth IRA
  • Solo 401(k)
  • SEP IRA
Saving/Investment Planning

Once your business creates consistent profits, it is important to consider ways to save and thoughtfully invest your excess retained earnings. Mocek reveals just how crucial it is  to invest your excess profit into the business first if necessary. Some of those business expenses could look like this:

  • Any immediate inventory or equipment needs are met
  • Remaining debt, if any, is evaluated
  • Marketing needs
  • Personnel needs
  • Cash flow planning

Once those expenses have been accounted for you can begin to think about where to invest your retained profit. Some options Mocek offered were:

  • Checking and savings account – default option
  • Corporate investment account - typically held in stocks, bonds, mutual funds, money market, and treasury
Insurance

Mocek suggests that when looking at insurance for small businesses you should consider the following:

  • Life Insurance
  • Protection
  • Succession Planning

It is important to have these in place as it is a crucial step for the continuation of the business in the event of an owners’ sudden death and makes the transition of assets and business easier. It also helps prevent disruption of cash flow, a liquidity event with other assets, and helps protect your family from business related debt.

If you want to learn more and didn’t get a chance to attend the workshop, click here to download the presentation.