Recently, my company sponsored an event that celebrated the stories of successful female founders of Oklahoma City businesses. We got behind this first-time event at a new coworking space on Film Row because entrepreneurs and business owners – especially those with growing families – usually have many questions that we can help answer.
If your business is just starting out, however, you may not know what to ask to set your business up for success. Here are five questions to run by your financial advisor before you go from dreaming to doing:
- What entity structure is best? Whether to establish your business as a single-member LLC, partnership, S or C corporation is an important decision. It affects everything from accounting and record keeping requirements to liability, taxation and fringe benefits for owners. Although it can be changed later, it’s best to start off on the right foot.
- Should I take on debt? Many people incorrectly assume that all debt is bad debt. That’s simply not true, but debt should be strategically incurred and properly managed. Talk with your advisor about the best way to finance your business and prioritize where you take on debt to ensure it has the greatest impact on success.
- How should I pay for expenses? Open a separate checking account to pay for business expenses. If you pay for personal expenses out of the business account or vice versa and your business one day gets sued, it puts your personal assets at risk, too.
- What deductions should I track? We find entrepreneurs often underestimate the accounting work their new business will require. Take the time to visit with an accountant early on about qualifying deductions to track, classifying expenses and general financial statement preparation. Even if you take these tasks on personally, a brief consultation can set you up for long-term success.
- How much insurance do I need? Depending on the industry, work functions and presence of employees, your insurance needs may vary from other small businesses. Most will need General Liability and Property Insurance at least. Some will need Commercial Auto (if you have company vehicles) or Workers’ Compensation Insurance (if you have employees) as well. Businesses and individuals are under-insured more often than over-insured. However, the goal is to get you just the right amount to manage risks and protect against financial loss.
When you own a business, your professional and personal financial success go hand-in-hand. Protect your family finances by enlisting an expert before you launch your new business.
Aaron Waters is a wealth advisor for Wymer Brownlee Wealth Strategies. He joined the company’s Enid office in 2010 and now operates from its location at Portland and Memorial in Oklahoma City. Aaron obtained a Bachelor of Business Administration in financial management from Abilene Christian University. He loves golf, fishing, music and travel – but nothing more than his wife, Natalie, and daughter, Ella Kate.
Aaron Waters, Registered Representative. Securities offered through HD Vest Investment Services®, Member FINRA/SIPC. Advisory services offered through HD Vest Advisory Services® Insurance services offered through HD Vest Insurance Agency, LLC. 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038, 972-870-6000. Wymer Brownlee Wealth Strategies is not a registered broker/dealer or registered investment advisory firm.