If you are a small business owner, your business is likely a great source of pride. It’s also likely that it consumes a significant portion of your time. Your commitment and diligence play a crucial role in driving the U.S. economy, for which I express my sincere appreciation.

As a small business owner among the over 30 million in the U.S., I understand how difficult it can be to start, run, and grow your business. While you’ve been busy creating jobs—nearly two-thirds of the new ones since 1995—you might have accidentally put your own financial health on the back burner. As the owner of Blair Capital Management, I’m here to help by sharing the top 5 retirement mistakes that many small business owners make and showing you how to steer clear of them.

1. Neglecting Personal/Family Retirement & Financial Planning

It’s easy for business owners to overlook their personal financial well-being—especially for an event that seems far away, like retirement. When you have a full plate with your business and other aspects of your life vying for attention, your retirement planning may take a back seat. However, neglecting your retirement plan could have serious consequences.

The longer you wait to develop a retirement plan, the greater the risk of not retiring on your terms. People say, “Time is money,” and it is also a helpful resource when planning for distant goals. The inverse is true too; the lack of time can be a challenge difficult to overcome. As a business owner, it’s important to have clarity regarding what you want retirement to look like for you, so you can start building a plan to pursue it.

Will you continue running your business? Are you planning to pass it on to your children or grandchildren? Or do you plan to sell it and retire with the sale proceeds? What sale price would be enough to fund your retirement lifestyle?

With a skilled financial advisor, you can take the first steps toward establishing a comprehensive retirement plan that satisfies the needs of your business finances, your family finances, and your personal retirement planning.

2. Not Having a Business Succession Plan

You’ve poured your heart and soul (as well as many valuable years of your life) into building a successful business. Setting a business succession plan outlines essential details regarding:

• Business continuity
• Leadership succession
• Ownership transitions
• Who will buy the business and how will they fund the purchase?

If anything happens to you, or even your employees, there should be a clear plan of action that helps maintain the longevity and success of your business.

Another key component of a business succession plan often includes buy–sell agreements and key man life insurance. A buy–sell agreement outlines the process of buying out a deceased or departing owner’s share of the business. Key man life insurance supplements the business with financial support in case a key employee or owner passes away unexpectedly.

Without these succession planning components, your business could experience immense uncertainty if anything happens to you or another owner.

3. Not Choosing the Right Entity Structure and Business Insurance

Selecting the appropriate entity structure for your business, such as an S corporation or C corporation, has significant tax and liability implications. The choice can impact your personal liability, taxation, and even your ability to raise capital.

To choose the most advantageous business structure for your business, it’s important to research your options thoroughly; and consult with a financial planner professional for an informed decision that aligns with your business goals.

Additionally, business insurance is non-negotiable. Proper entity structure may prevent liabilities arising from your business, and it is important to safeguard the assets of the business. An appropriate level of business insurance shields your business from unexpected events, such as lawsuits, property damage, or employee injuries.

Investing in the right insurance coverage safeguards your business’s financial stability. A financial planner professional can help you assess your insurance coverage and identify any gaps.

4. Inadequate Employee Benefit Structures

If you were one of the businesses affected by recent labor shortages, you know how crucial it is to attract and keep a dedicated team. Offering employee benefits like these helps your business remain competitive in the labor market:

• Retirement plans
• Health insurance
• Dental and vision
• Other perks

Without structured employee benefits, your business could experience higher turnover or face a lack of applicants for open positions.

At Blair Capital Management, I work with experts in benefits who can help you take care of your employees by working with you to design a comprehensive benefits package aligned with your business’s financial capacity and employee needs.

5. Neglecting Investment Diversification

Over-relying on your business’s success to provide financial stability could backfire if the market shifts or the business faces a dip in profitability. Diversifying your investment portfolio beyond your business can help reduce the risk of putting all your eggs in one basket.

If there is a problem in the business, it is likely you will be called upon to fix it. The fix may mean changing how you do business, but it may also mean more capital—so you need to be prepared.

It is smart to build a nest egg outside of your business. Construct a stable investment portfolio that has a mix of securities, such as:

• Stocks
• Bonds
• Real estate
• Exchange-traded funds (ETFs)
• Mutual funds

It’s important to diversify based on industry as well. For example, if your investment portfolio is made up only of stocks in the technology sector, a disruption in that industry could result in a larger negative impact on your investments.

During periods of economic downturn, the right diversification strategy could cushion potential blows to your portfolio and minimize losses.

Work With an Experienced Professional

As the owner of Blair Capital Management, I recognize the extensive demands and responsibilities that you, as a business owner, manage on a daily basis. You have a deep understanding of your business, and you deserve a financial partner who is both experienced and capable of supporting your comprehensive financial landscape.

I have provided guidance to business owners such as yourself in navigating and avoiding common financial pitfalls. My experience lies in crafting personalized financial plans that harmoniously address and integrate both your personal and business financial needs.

If you’re ready to steer your small business toward financial success, schedule an introductory consultation by calling (914) 413-9904 or emailing johnblair@blaircapitalmgt.com.

About John

John Blair is President and Founder at Blair Capital Management, LLC, a Registered Investment Advisor (RIA) that endeavors to offer personalized service and customized investment solutions to individuals, trusts, and high-net-worth investors. After over 40 years of experience in the financial markets, John has had a front-row seat for every bull and bear market and wants to offer his experience, knowledge, and skills to individuals rather than institutions. With an unwavering dedication to acting as a fiduciary and a desire to build long-term, successful relationships, John helps his clients pursue their financial objectives. He cares deeply about safeguarding and growing their wealth, so they can focus on their lives—not their money. He strongly believes in a disciplined approach to investing with paramount importance placed on preservation of capital and measuring risk and reward through all circumstances.

John holds a bachelor’s degree in economics and master’s degree in business administration from the University of Southern California, and also completed graduate work in economics and philosophy. John and his wife of 45 years have four grown children and 13 grandchildren. In his spare time, he loves to read biographies and books about history and finance, and is a huge horse racing and football fan. John cheers for everything University of Southern California, and has been very involved in alumni affairs and mentoring students.

Blair Capital Management LLC (Blair Capital) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Blair Capital and its representatives are properly licensed or exempt from licensure.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Diversification does not ensure a profit or guarantee against loss.

Generally, among asset classes, stocks are more volatile than bonds or short-term instruments. Government bonds and corporate bonds have more moderate short-term price fluctuations than stocks, but provide lower potential long-term returns. U.S. Treasury Bills maintain a stable value if held to maturity, but returns are generally only slightly above the inflation rate.

For additional information, please visit our website at http://www.blaircapitalmgt.com