How Women Can Transform Entrepreneurial Success into Lasting Family Wealth

By:  Clinton Miller, CFP®

Running a successful business is hard.

To become successful, you’ve probably focused your time and energy on growing it for years.  If you grew your business while you had children, you faced impossible balancing acts all the time.  Your family has probably sacrificed in ways that are invisible from the outside, maybe in ways you can’t even express.

Most entrepreneurs with families want to maximize the positive impact business success has on their family’s future. But they’re so busy and focused on business growth they miss important considerations along the way.  They may not think about a legacy until they’re ready to exit.

But this transformation isn’t a one-time event.  It’s more like creating an exercise plan to get in better shape.  You don’t get super-fit in one mammoth week-long workout.  It takes intentional, small habit choices over a long time to reach long term success.  Here are 5 things to consider as you work to get your business in shape to build lasting family wealth:

1. Plan for taxes: Of course, you pay attention to taxes because you own a business!  You probably work hard to minimize them at the end of each year. But planning long-term is also key.  You can keep more money in your family instead of Uncle Sam’s pockets.  Business structure, compensation, and retirement deferrals are considerations that can reduce your lifetime tax burden.
2. Debt Load: Debt is a powerful tool, but it’s costly and creates risk, especially as interest rates are rising.  With planning and good management, carrying debt is a normal part of doing business.  Don’t let the tax-tail wag the debt-dog, borrowing heavily to buy equipment you may not need to save on this year’s taxes.
3. Spending and lifestyle: As income rises, spending rises too. There’s nothing wrong with this! But when we’re busy, its easy to spend in ways that don’t really align with our goals. Is your spending saving you time? Is it giving you things you genuinely use and enjoy? Does it allow you to make lasting family memories? If not, why?
4. Risk: Entrepreneurs often reinvest everything back into their businesses as they build them.  If this sounds like you, stop and think about what it would mean for your family if you couldn’t work.  What if you died unexpectedly?  Would they benefit from what you’re working so hard for?
5. Keep the end in mind: One way or another, you’ll stop running your business someday.  Planning for your exit is crucial.  Things may change and that’s totally fine! But uncertainty about the future is no reason not to plan.

These considerations can help transform entrepreneurial success into greater family wealth.

If this conversation hits home for you and you’d like to talk more with a Pleasant Wealth advisor, click here to schedule an introductory call.