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Becoming a successful entrepreneur has overtaken home ownership as defining the American Dream, thanks to the recent collapse of the real estate market and the made-for-Hollywood stories of folks like Steve Jobs or Mark Zuckerberg.
As you well know, fame is the least of the attractions in owning a business. More compelling to the tens of thousands of individuals starting a small business every year is the allure of being master of one’s own professional success.
But as exhilarating as it is be the Boss, there are also significant risks to going out on your own. Unfortunately, the failure rate of small business is high, with only 20 percent of new businesses surviving for five years. Another depressing statistic: fewer than 40 percent of solo self-employeds make more than $25,000 a year.
The old saying “No one plans to fail, but many fail to plan” has special applicability to the new business owner. Starting up can be deceptively simple: Facebook was launched with just an innovative idea, a laptop, and a dorm room. But from the very outset, business owners need to be aware that even the most basic business model entails considerable financial planning complexity. At the same time, this complexity creates opportunities to reap unique financial benefits.
Comprehensive financial planning for an individual or couple generally involves tax planning, risk management, investment planning, retirement planning and gift and estate planning. So, for each of these areas, let’s consider how business ownership takes this planning to another level.
One point should be clear when it comes to financial planning for the small business owner: the do-it-yourself drive that helped you start your business will not serve you well when it comes to managing the many financial issues created by that business. This is where professional expertise often becomes necessary.
Exercise your privileges as Boss and delegate these issues to qualified tax and financial planning professionals. Their advice can make all the difference in improving your chances of business success.
*All videos were created by an independent third party. Demars Financial Group LLC, is not held liable for the content found in any video, does not offer tax advice or insurance planning. Insurance products are offered through Ted Demars and David Demars as independent agents.
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