The Top 10 Mistakes of Business Owners
Many business owners are ignorant of the benefits they can receive. If you are earning enough money to comfortably invest in a business, then consider following these rules to avoid making any preventable mistakes:
1. Taxes – If your business makes less than $500,000 a year, find out if paying yourself in dividends will lower your tax expense and help you increase your savings annually.
2. Money – Although it is important to invest your money into your successful business, it is important to store your money in different ways. Withdraw a certain amount of money from your company account and keep it separate and safe inside a tax-efficient account so that it can grow independently over time.
3. Sticking with Tradition – If you are questioning how well your business is doing and if you will be able to retire in the future, it is a sign that you need to find a different financial planning strategy. It is important to break away from the traditional and conventional methods if they aren’t going to work for you anymore.
4. Not Finding Transparent Financial Advisors – Look for a financial advisor that gives detailed reports and openly discloses his/her fees. This lets you know what you are actually paying for and whether or not you should trust your consultant.
5. Not Staying on the Same Page – Conduct an annual meeting in which all of your business advisors communicate with one another to stay on top of your needs. In addition, hire a driver to make sure that your advisors are working towards the same goal and bringing the maximum amount of value to your business.
6. Staying Unincorporated – Turning your business into a corporation may bring you future benefits. Some perks about being in a corporation are that you can establish a trust, which can help you with your financial planning and tax savings.
7. Getting Emotional – As a result of emotional trading, an annual amount of 5% is lost in equity markets. Remove any feelings of fear or greed from your mind and invest according to your advisor to help yourself in the long term.
8. Growing without a Plan – A successful business needs to have a planned out succession. Many entrepreneurs make the mistake of not having one and it can strongly affect their retirement and financial future.
9. Not Having Insurance – Purchase an insurance plan to protect your business in the long run. It is impossible to predict what will happen to you or your family in the future, so it is important to have the right insurance set in place for protection.
10. Keeping Charity and Work Separate – Believe it or not, your charitable gifts can actually help your investment plan. Create accounts meant specifically for donating that helps you give back to your community more effectively and leave a lasting legacy.
Reading the above tips will help you improve your financial future and prevent yourself from not realizing the many opportunities you have with your money. Always make sure to have a financial advisor help you out with your decisions and make sure they are trustworthy as well. Saving up for your future retirement goals is not an easy task, so don’t be afraid to have some help along the way.
