Taking the time to learn about the 2020 pandemic tax changes may make a difference. Some laws have extensions into 2021 for eligible tax credits and deductions. Here is a tax planning list for small-business owners preparing for year-end tax filings. Incorporating these tips into monthly, quarterly, and annual tax planning routines may prevent errors, could help you avoid delays and may help to manage stress levels for small-business owners.

Get Organized

Early tax planning may help integrate monitoring and reporting practices that authenticate small business year-end tax liability. Small businesses that qualified for one of the federal assistance programs must ensure that the information complied is accurate to take advantage of the tax credits.

Reconcile All Business, Credit, and Bank Accounts

Following the end of each month, these reports should support the final tax reports and the entity’s financial statements. Start by cross-referencing and reviewing expense classifications. Deductible expenses may be forgotten or incorrectly classified.

The process gives an overview of an entity’s taxes and financial condition — valuable information for possibly making good business decisions.

Payroll Tax, Credits, and Deductions

Payroll data reports sent to federal, state, and local agencies need to be verified and accurate. Submissions include withholding information for each employee used for computing a company’s tax obligations. Depending on the state of residence, states have specific payroll form numbers, filing frequency and due dates. Be sure to check the submission dates to remain compliant. Late or inaccurate reporting may come with penalties.

IRS submission schedules are quarterly. Small businesses must report income, Social Security, wages and workers’ compensation, unemployment and Medicare taxes.

In 2020, Form W-4 changes were enforced for new and current employees withholding revisions. 2020 also brought changes for non-employee compensation requiring FORM 1099-NEC to report paid services of $600 or more. Not to be confused with the Form 1099-MISC that reports other paid income.

2021 Pandemic Tax Credits

The Taxpayer Certainty and Disaster Tax Relief Act, enacted December 7, 2020, changed employee retention tax credits for small-business owners. Under the Coronavirus Aid, Relief and Economic Security Act, the Employee Retention Credit extended benefits into the first two quarters of 2021.

Eligible employers should have received the allowable tax credits on payroll liabilities for the first two quarters of 2021 as a refundable tax credit against the employer’s share of Social Security payments equal to “70% of the qualified wages they paid to employees after Dec. 31 2020, through June 30 2021.” The Internal Revenue Service says, “qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021.”

A second tax credit program for eligible employers is the American Rescue Plan Act, enacted in March 2021 for ERC wages paid during the third and fourth quarters of 2021. ARPA guidelines are available from the Department of the Treasury and the IRS.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

LPL Tracking # 1-05188522

Sources:

Depositing and Reporting Employment Taxes | Internal Revenue Service (irs.gov)
https://www.irs.gov/businesses/small-businesses-self-employed/depositing-and-reporting-employment-taxes

New law extends COVID tax credit for employers who keep workers on payroll | Internal Revenue Service (irs.gov)
https://www.irs.gov/newsroom/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payroll

IRS provides guidance for employers claiming the Employee Retention Credit for first two quarters of 2021 | Internal Revenue Service
https://www.irs.gov/newsroom/irs-provides-guidance-for-employers-claiming-the-employee-retention-credit-for-first-two-quarters-of-2021

Treasury, IRS provide additional guidance to employers claiming the employee retention credit, including for the third and fourth quarters of 2021 | Internal Revenue Service
https://www.irs.gov/newsroom/treasury-irs-provide-additional-guidance-to-employers-claiming-the-employee-retention-credit-including-for-the-third-and-fourth-quarters-of-2021

The post 4 Year-End Tax Planning Tips for Small-Business Owners  appeared first on Tribox Private Wealth.

Maintain Liquid Assets

Everyone needs to have savings. For small business owners, savings are critical. Liquid assets may help you weather challenging times and make you a more attractive candidate for a loan. When times are tough, cash may help carry you through.

Engage a Financial Professional

You may assume you do not have enough money to make paying a financial professional a worthwhile investment. You may believe you cannot afford one. However, as a small business owner, you may benefit from getting help from a financial professional. A financial professional may help manage your tax burden and your operating expenses, with a focus on cash flow.

Do Not Overinvest in Physical Space and Equipment

It may be tempting to purchase or rent a storefront for your new business. However, it may help to avoid falling into the trap that hurts many business owners—the urge to quickly invest in a brand-new office, buy a company car, or otherwise overcommit to physical overhead as soon as the money starts coming in. By expanding at a more reasonable pace as your business growth demands, you may be able to maintain a more sustainable level of growth.

Avoid Ultra-Risky Stocks

Running a business is a gamble in and of itself, so adding a risky stock portfolio on top of this may expose you to extraordinary risk. Investing in individual stocks may be too risky. Instead, consider index funds that track one of the major market indices that might be less risky. However, be aware that no investment is risk-free.

Plan Your Succession

One frequently overlooked part of a successful small business strategy is having a contingency plan for transferring ownership at the time of your retirement or demise. As a business owner, you should have, at minimum, a last will and testament and life insurance in place.

Your will might include instructions to keep things running in your absence (like managing payroll), while life insurance may provide funds for the loved ones you leave behind. A succession plan is a strategy worth pursuing rather than leaving this issue unmanaged.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or insurance product(s) may be appropriate for you, consult your financial professional prior to investing or purchasing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All indexes are unmanaged and cannot be invested into directly.

Although index funds are designed to provide investment results that generally correspond to the price and yield performance of their respective underlying indexes, the trusts may not be able to exactly replicate the performance of the indexes because of trust expenses and other factors.

Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

This article was prepared by WriterAccess.

LPL Tracking #1-05372579

The post 5 Tips for Saving and Investing as a Small-Business Owner  appeared first on Tribox Private Wealth.

Fortunately, business owners have a couple of advantages when funding college expenses. Here are a few ways small-business owners might save money while their children are in college.

Hire Your Children at Your Business

Employing your children may be a great way to shift income from your business in their direction while they are still in a low tax bracket. For the 2023 tax year, tax filers as single individuals (or married filing separately) do not have to pay any federal income taxes on the first $13,850 in income.² A business owner who employs a person (including a family member) may deduct this payment for the employee as a business expense.

If your child is a diligent saver, they may be able to set aside the first $6,500 in income (the maximum annual contribution in 2023) in a Roth IRA.⁵ Not only may Roth contributions grow tax-free for decades, but they also do not count against your child’s expected family contribution (EFC) on the Free Application for Federal Student Aid (FAFSA).⁴

Use Section 127 or 132 Benefits

If your child is working at your business, you may be able to take advantage of the Section 127 educational benefit. This rule allows the parent-employer to provide up to $5,250 annually in educational benefits to their child-employee. This benefit is tax-free to the employee and tax-deductible to the employer.³

There are a couple of caveats, though. If you offer this benefit to your child as an employee, you must also offer it to other employees. And this benefit is available only if your child is at least 21 and is not a dependent of the business owner.

Meanwhile, Section 132 allows employers to provide (and deduct) other tax-free fringe benefits, including educational costs. Section 132 has its own restrictions, including requiring the educational expenses to be job-related. The education the employee receives also may not qualify the employee for a new trade; it must aid the employee in the position or career they are currently doing.

These deductions are available to businesses of all sizes and types, so do not feel you need a retail storefront to take advantage. If you have a side business like a sole proprietorship or an LLC, hiring your children to help your business during college may provide them with invaluable work experience while also helping them set aside funds for their college education.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05374528

Footnotes

¹ Survey Says Parents Are More Worried about Paying for College https://www.savingforcollege.com/article/survey-says-parents-are-more-worried-about-paying-for-college

² Standard Deductions for 2022 and 2023 Tax Returns, and Extra Benefits for People Over 65
https://www.forbes.com/advisor/taxes/standard-deduction/

³ 26 U.S. Code § 127 – Educational assistance programs
https://www.law.cornell.edu/uscode/text/26/127

⁴ How a Student’s IRA Is Counted for Financial Aid
https://www.kiplinger.com/article/college/t032-c001-s001-how-a-student-s-ira-is-counted-for-financial-aid.html

⁵ Roth IRA Contribution Limits for 2023 Are Better Than Ever
https://www.fool.com/retirement/2022/11/19/roth-ira-contribution-limits-for-2023-are-better-t/

The post A Business Owners’ Guide to Tax-Smart College Planning  appeared first on Tribox Private Wealth.

In today’s rapidly evolving business environment, standing still is not an option. The companies that thrive are those that innovate, adapting to change and embracing new technologies.

Innovation is more than just a buzzword – it’s a vital strategy for future-proofing your business. Here’s how small businesses can leverage innovation and benefit from a range of financial credits and incentives.

Research Credit: A Catalyst for Technological Advancement

The Research Credit, also known as the Research & Experimentation Tax Credit, offers a dollar-for-dollar reduction in federal income taxes. It aims to encourage businesses to invest in research and development, stimulating technological progress.

Whether you’re developing new products, refining existing processes, or exploring uncharted territories in your industry, this credit makes innovation more financially viable for businesses of all sizes.

Commercial Clean Vehicle Credit:      

Driving Eco-Friendly Solutions

Environmental sustainability is no longer just a trend – it’s a responsibility. The Commercial Clean Vehicle Credit, available under Internal Revenue Code (IRC) 45W, assists businesses that purchase qualified commercial clean vehicles.

This incentive not only reduces your company’s carbon footprint but also positions your brand as an industry leader in eco-friendly practices. It’s a win-win for both your bottom line and the planet.

Alternative Fuel Vehicle Refueling Property Credit: Energizing Green Transportation

As the world moves towards cleaner energy, businesses can capitalize on the Alternative Fuel Vehicle Refueling Property Credit. This initiative supports companies transitioning to alternative fuels or those providing cleaner fueling options to the public.

If your business operates a fleet of vehicles or is in the fuel supply chain, this credit can facilitate your shift to greener alternatives, promoting sustainability and energy independence.

Utilizing These Incentives Strategically

Utilizing these incentives requires a careful understanding of the eligibility criteria and application process. Collaborating with tax professionals or specialized agencies can help you navigate these complexities.

The Bigger Picture:

Cultivating a Culture of Innovation

Beyond these specific credits and incentives, adopting a culture of innovation can lead to organic growth and competitiveness.

Encourage creativity, foster collaboration, invest in continuous learning, and be open to failure as a pathway to success.

The Future is Bright

Innovation and “looking forward” incentives are more than just opportunities to save on taxes – they are investments in the future of your business.

By leveraging these credits, small businesses can pave the way for growth, sustainability, and success in an ever-changing landscape.

Don’t let your business be left behind. Embrace innovation, take advantage of these incentives, and lead your business confidently into the future.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

This article was prepared by FMeX.

LPL Tracking #1-05377832

The post Fueling Growth For Your Small Businesses appeared first on Tribox Private Wealth.

Now, let’s flip the script for a moment and talk about something just as important, if not more so – your business. How much time do you invest in planning, strategizing, and calculating the moves that will take your small business to the next level?

Velocity of Money in Fantasy Football

In economics, the concept of the “velocity of money” refers to how fast money changes hands in an economy, stimulating growth and prosperity. The quicker money circulates, the better it is for the economy. Similarly, in fantasy football, the more quickly you adapt and change your roster according to the situation, the more points you generate.

Velocity of Money in Business

Now let’s apply that concept to your business. The time you spend planning and strategizing for your business increases the “velocity” of growth. This means, the quicker you act on opportunities, make changes, or even pivot if something isn’t working, the more your business benefits. And just like in fantasy football, you have to be agile, alert, and responsive to the changing market conditions.

Time Investment Multiplier

Consider this: what if the 4 hours a week you spend analyzing player stats, trade possibilities, and match-ups in fantasy football were directed towards enhancing your business strategy? That’s about 208 hours a year! Imagine the projects you could launch, the marketing strategies you could develop, or even the additional clients you could reach.

Time is the one resource that, once spent, you can’t get back. The question then becomes: How are you dividing your time to generate the best returns? You don’t necessarily have to give up on your passion for fantasy football, but a little balance could tip the scales in favor of your business success.

This fantasy football season, let’s also kick start a season of planning, growth, and success for our businesses.

Important Disclosures:

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. NewEdge Advisors, LLC and Tribox Private Wealth are separate entities from LPL Financial.

LPL Tracking #478364

The post Fantasy Football vs Business Planning: The Velocity of Time & Money appeared first on Tribox Private Wealth.

According to a 2022 study by the Global Entrepreneurship Monitor, there are 31 million entrepreneurs in the U.S., which is about 16 percent of the adult workforce. Of that workforce, 35 percent of entrepreneurs and small business owners are between 50-59 years of age. [i]

Anybody can become an entrepreneur if they have an idea and are willing to do the work required to get their product or service out to the public. However, becoming an entrepreneur is extremely challenging, and most small business ventures still need to make it to the finish line. That should not deter you, though, from pursuing your dreams. Get a head start on your preparations by consulting with a financial professional to see where you stand.

How do you become an entrepreneur? There are a few steps you can take to get started.

• To be an entrepreneur, it helps to be an expert in your field. Build your knowledge base and skill set – Having a good foundation of knowledge in the field you are starting a business in can allow you to make better decisions, troubleshoot problems, and adapt to an ever-changing market and world.

• Consult a financial professional – Guidance from a financial professional might offer you a supportive perspective to help you avoid unnecessary mistakes and develop a strategy for which steps you should take to get your company off the ground.

• Create a detailed business plan – Ensure you understand the costs and necessary machinery, supplies, production space, and resources required to run a business. What are the potential supply and demand requirements, the essential insurance coverage, licenses needed, etc., to avoid issues down the road that might create a problem for your business? 

• Secure financing if needed – Do you have the money to launch your business? Have you spoken to a bank for a venture capitalist that may be able to help?

• Build your business – Once everything is in order, it is time to build your business. This will require a significant amount of your time and effort. If you follow the steps above, it should make it easier for you to establish and grow your company. 

Find the right business for you. Engage your target audience that will inspire you to do the necessary work to pursue your goals. Learn the value and techniques of selling an idea and marketing your product or service. Why wait? Reach out to a financial professional today!

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions

[i] 20 Entrepreneur Statistics You Need To Know (2022) (apollotechnical.com)

LPL Tracking # 1-05351830

The post Being Your Own Boss – A Different Kind of Freedom appeared first on Tribox Private Wealth.

Before you make the commitment to starting your own business, here are a few important factors to consider.

Personal investment

Why do you want to start a business? For the most part, you should believe you have a great idea that you are passionate about. Giving your business a chance to be successful will require a personal commitment and probably some sacrifices. Are you prepared to invest the time, money, and personal resources to get your business started?

As you might imagine, there’s a lot that goes into starting a business. You’ll have to do some market research to determine the potential size of your market, identify the competition, and set the price of the goods or services you’ll offer. You should develop a written business plan, research the best legal entity to use for your business, and understand what licenses and/or permits you’ll need. You’ll have to figure out how much capital you’ll need to start your business, and where that capital will come from.

Type of business

What kind of business do you want? Do you have a unique idea, or do you want to get involved in a type of business that already exists, like a franchise? What products or services will your business provide? Have you identified your target market? Who is your competition, and what will separate your business from your competition? Depending on the type of business, how long will it take before your products or services are available to your target market? How big and how quickly do you want your business to grow?

The type of business you choose should not only match your talents, abilities, and interests, but it also should have a viable place in the market, based on your competition and the potential demand for the products or services your business will offer. Getting this information will take some time and effort, but many businesses fail simply because they’re in the wrong market or the competition is too strong.

The business plan

It’s one thing to have a great idea for a business, but it becomes much more real when you put it down on paper. A business plan is essentially the story of your business: the name of your business, what your business does, how you came up with the idea for your business, what markets you serve, what differentiates your business from the competition, where your business is now, and where you see it in the future. Not only should your business plan serve as a road map to a successful business venture, but if you’re going to seek financing for your business, you’ll almost certainly be asked for a business plan. There’s generally no set form for use in developing a business plan, but most plans cover these essential elements:

• An executive summary, which briefly describes your business as a whole and touches on your business’s profile and goals
• An in-depth explanation of the history and development of your business
• A summary of your products and/or services
• A customer description, market analysis, and competitor analysis
• A description of your business’s legal entity (e.g., corporation, partnership, sole proprietorship) and management organization
• An explanation of your marketing plan and sales strategy
• A capitalization plan including projected revenues, cash flow projections, pro forma financials, and an explanation of how you’ll use funds

Selecting a business entity

One of the first decisions you’ll need to make is what form of legal entity your business will take. If you’re starting a business from scratch (as opposed to buying an established business), your options are many. The type of entity you select is important because it can determine the types of permits you’ll need, where and how your business should be registered, the extent of protection from personal liability you’ll receive, and the amount and form of taxes that may have to be paid. While it’s a good idea to consult a financial or legal professional before selecting the type of entity for your business, here’s a brief description of the more common forms of business structures.

Sole proprietorship: A sole proprietorship is the most straightforward way to structure your business entity. As a sole proprietor, your business is simply an extension of you. Sole proprietors are liable for all business debts and other obligations the business might incur. This means your personal assets can be subject to the claims of your business’s creditors.

Partnership: A partnership is a business entity where two or more people enter into a business relationship for mutual profit. Partnerships are organized in accordance with state law. In a general partnership, all partners can act on behalf of one another in furtherance of partnership business, which means each partner is personally liable for the acts of the other partners, and all partners are personally liable for the debts and liabilities of the partnership. Limited partnerships and limited liability partnerships may provide some liability protection for partners according to the state law where the partnership is formed.

Corporations: There are several different types of corporations. Generally, two advantages of corporations are that they provide a shield from individual liability and are the easiest type of entity to use to raise capital. Some common types of corporations are S corporations and limited liability corporations or companies. S corporations and most limited liability corporations pass income, gains, deductions, and losses of the business through to the shareholders. By comparison, a C corporation is taxed as a separate entity.

Financing your business

Your business plan is in place. Now you have to figure out where you’ll get the funds to set your dream in motion–and sustain it. The first step in determining your financing needs is to develop a line-item budget, projected over a period of months and/or years.

Next, you’ll need to figure out how to finance your business. The two general categories of financing available for businesses are debt and equity. Debt requires repayment of a loan. Equity involves raising capital by selling parts of the business to investors.

One place to look for capital might be your own assets. You may be able to raise money for the business from your savings or borrow against a retirement plan, life insurance policy, credit card, or the equity in your home.

Another common source of funds for new businesses is what’s called “friends and family.” However, such funding is most likely to be successful if it’s structured in a businesslike way, with clear terms of repayment or ownership participation.

You can apply to banks or credit unions for loans. The Small Business Administration has a website devoted to women-owned businesses at www.sba.gov/content/women-owned-businesses.

There you can find resources to help you start and finance your business. Also, your local chamber of commerce may be able to refer you to state and local agencies that provide financial assistance to new businesses located within your geographic area.

Anything else?

There are plenty of other things to consider, such as taxes, licenses, fees, and permits. You’ll need to think about where to locate your business and how you’ll market it. Will you have employees? Will you add a retirement plan? If so, you’ll have regulatory requirements and tax responsibilities, as well as possible workers’ compensation to consider. But you don’t have to go it alone. There are experts available to serve as mentors or counselors. Check the Women’s Business Resources section of the Small Business Administration website at www.sba.gov for information on locating a mentor.

Additional questions to consider

• How will you manage your business?
• How many employees will you need to start up?
• What types of suppliers will you need to contact?
• How will you price your product or services relative to your competitors?
• What kind of insurance do you need?

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal professional.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

This article was prepared by Broadridge.

LPL Tracking #1-05114005

The post Women – What You Should Know When Starting a Business appeared first on Tribox Private Wealth.

If you are raising capital to start a new business, asking family members to contribute from their personal savings is an especially delicate proposition. When attempting to obtain financing from a bank or a venture capital firm, you emphasize all the reasons why you believe your business will succeed, while downplaying any potential downsides. Selling your venture in this way creates no ethical dilemmas because the people you are speaking to are experienced professionals who look for good investments but don’t risk their own nest eggs. By contrast, asking your loved ones to contribute their hard-earned savings should be approached differently to avoid feelings of guilt or shame that could arise later if relatives or good friends make contributions they could not afford to lose.

Therefore, when presenting an investment opportunity to a person close to you, protect his or her interests by being honest about the risk that the money invested could be lost. Alternatively, consider asking to borrow the money, rather than taking it as an investment, and agree to pay it back with the appropriate amount of interest. Taking a loan from a personal contact makes sense if you are confident of your ability to repay the debt within a reasonable period of time, regardless of the success of your business.

To avoid potential conflicts, you may want to restrict your fundraising efforts to family or friends who have ample funds and are experienced in business. This can improve the chances that your prospective investor understands the risks involved and is assessing your proposal on appropriate merits. Since the mere act of asking a loved one for money can lead to an uncomfortable situation, reassure your friend or family member that you will understand if he or she rejects your proposal or needs time to think about it. To avoid putting people on the spot, consider preparing a formal pitch, complete with PowerPoint slides and a business plan, to present to a group of family members and friends.

However, keep in mind that the person with the most cash and business experience may not be the person you necessarily want as an investor in your business. In return for his or her investment, your investor may want a level of control in the business that would interfere with your ability to make independent decisions. Especially if you have had conflicts with a relative in the past, avoid asking him or her to take a stake in your business. It is also important to note that, if the friend or relative who has been granted an equity stake in your business should die before the investment has been repaid, the heirs may take a different approach to managing their stake than your initial investor.

Regardless of relationships, potential investors should understand that they could lose their investment and at what stage in the growth of the company they can expect a return on their capital or a repayment of their loan. Ask a legal professional representing the interests of the investor to draw up a formal agreement and outline the potential risks associated with the investment, the level of control in the business that will be granted, and how and when the debt or investment will be repaid. Future misunderstandings can be managed by thoroughly discussing the details of the agreement ahead of time.

Important Disclosures

This material was created for educational and informational purposes only and is not intended as legal or investment advice.

This article was prepared by Liberty Publishing, Inc.

LPL Tracking #1-05189780

The post Asking Family or Friends to Invest in Your Business appeared first on Tribox Private Wealth.

As a business owner, putting all your profits back into the business may be tempting, especially during the lean years. However, when it comes to saving and investing as a business owner, there are other paths you could consider for the long run without so much emphasis on the short term.

Maintain Liquid Assets

Everyone needs to have savings. For small business owners, savings are critical. Liquid assets may help you weather challenging times and make you a more attractive candidate for a loan. When times are tough, cash may help carry you through.

Engage a Financial Professional

You may assume you do not have enough money to make paying a financial professional a worthwhile investment. You may believe you cannot afford one. However, as a small business owner, you may benefit from getting help from a financial professional. A financial professional may help manage your tax burden and your operating expenses, with a focus on cash flow.

Do Not Overinvest in Physical Space and Equipment

It may be tempting to purchase or rent a storefront for your new business. However, it may help to avoid falling into the trap that hurts many business owners—the urge to quickly invest in a brand-new office, buy a company car, or otherwise overcommit to physical overhead as soon as the money starts coming in. By expanding at a more reasonable pace as your business growth demands, you may be able to maintain a more sustainable level of growth.

Avoid Ultra-Risky Stocks

Running a business is a gamble in and of itself, so adding a risky stock portfolio on top of this may expose you to extraordinary risk. Investing in individual stocks may be too risky. Instead, consider index funds that track one of the major market indices that might be less risky. However, be aware that no investment is risk-free.

Plan Your Succession

One frequently overlooked part of a successful small business strategy is having a contingency plan for transferring ownership at the time of your retirement or demise. As a business owner, you should have, at minimum, a last will and testament and life insurance in place.

Your will might include instructions to keep things running in your absence (like managing payroll), while life insurance may provide funds for the loved ones you leave behind. A succession plan is a strategy worth pursuing rather than leaving this issue unmanaged.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or insurance product(s) may be appropriate for you, consult your financial professional prior to investing or purchasing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All indexes are unmanaged and cannot be invested into directly.

Although index funds are designed to provide investment results that generally correspond to the price and yield performance of their respective underlying indexes, the trusts may not be able to exactly replicate the performance of the indexes because of trust expenses and other factors.

Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

This article was prepared by WriterAccess.

LPL Tracking #1-05372579

The post 5 Tips for Saving and Investing as a Small-Business Owner appeared first on Tribox Private Wealth.

Optimize Your Current Assets

One of the first steps toward financial independence is optimizing your current assets. This could take the form of increasing the profitability of your business by increasing your marketing, reducing your current costs and expenses, finding ways to reduce your tax burden, or continuing your education. You will need to take an inventory of your current assets and expenses and develop a strategic plan to optimize these factors and help your company reach its potential.¹

Pay Down Debt

There are two primary types of debt: productive and reductive. Productive debt is debt that helps nurture your financial growth and puts you on the path toward financial freedom. Reductive debt, on the other hand, is debt spent on items that will depreciate in value and not provide boosts to revenue or income. It is similar to credit card debt, and eliminating or at least reducing it can put you and your business on a path toward overall independence. Assess all of your debt and develop a plan to pay it down aggressively until it is eliminated.¹

Beef Up Your Savings

Savings are vital for yourself and your business since they will help you build wealth and financially prepare you for unexpected expenses. One way to increase savings as a business owner is to take advantage of your company’s savings plans. This can include IRAs, 401ks, and health savings accounts. You may also want to look at the various investment options for your personal and company funds that can create long-term returns.²

Give Your Insurance the Once Over

While growing company assets is crucial to achieving solid financing, so is insuring them. Without proper insurance, you risk losing what you’ve gained through your hard work. Review your insurance policies to make sure that you not only have all of your assets covered but that you have proper coverage limits. Policies you should consider reviewing include life insurance, disability, business, long-term care, health, and property and liability coverage.²

Follow the above tips to put yourself on the path to financial independence. Assistance from a financial professional can assist you in your wealth management efforts and overall financial goals.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or insurance product(s) may be appropriate for you, consult your financial professional prior to investing or purchasing.

Investing involves risks including possible loss of principal.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05370165

Footnotes

¹ “The 4 x 4 Financial Independence Plan for Entrepreneurs,” Entrepreneur.com, https://www.entrepreneur.com/leadership/the-4-x-4-financial-independence-plan-for-entrepreneurs/306064

² “How Entrepreneurs Can Safeguard Their Financial Futures—And Work Toward Financial Freedom,” Forbes, https://www.forbes.com/sites/forbesbusinesscouncil/2023/02/14/how-entrepreneurs-can-safeguard-their-financial-futures-and-work-toward-financial-freedom/?sh=123c28f17a65

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