How Small Businesses are Reinventing Themselves

How Small Businesses are Reinventing Themselves

American capitalism has never been more dynamic, even amidst an unforeseen pandemic.  The internet has partially leveled the playing field between large and small businesses.  However, the federal government’s corporate-friendly coronavirus financial aid programs have made survival, let alone profitability, that much more challenging for small businesses in Chicago, Libertyville, and beyond.  

There is a “new normal” in both business and life in general.  Retirement plans, customer interactions, and personal finances may never be the same.  Owners, managers, and employees of small businesses can benefit from the assistance of a savvy Libertyville, IL financial advisor, and perhaps emerge from the new economy on a path towards a sound financial future.

 

Are you on the right financial path? Contact Prism Planning Partners today for a consultation! 

 

Small Business Owners Can Benefit By Working With a Financial Advisor

Small business owners may want to consider not attempting to “go it alone” during this historically challenging period in time.  They can benefit from the guidance, expertise, and insight of an experienced financial advisor.  It is not enough to keep your head down, work your tail off, and hope for the best.  The tumultuous economy combined with a reduction in human interaction necessitates highly strategic planning with the assistance of an experienced Libertyville financial advisor.  Meeting with such a professional may add considerable value to a small business owner’s enterprise, potentially setting the stage for financial success in both the short and long-term.  

Though a financial advisor will not analyze the nuances of a business’s primary operations, he or she can help steer businesses in the right direction, providing long-term goals and advice on how to reach those benchmarks.  As an example, a financial advisor can help small business owners in the context of insurance planning.  If the business is not properly insured, it will prove challenging to bounce back from the death or impairment of an important employee, co-owner, or another key party.  Between key person insurance, life insurance, and overarching business insurance, a financial advisor can help prepare a business for the worst while hoping for the best. 

Financial advisors can also lend invaluable assistance in the management of a small business’s financial assets. Many small business owners do not have the time to research investments simply because they are focused on increasing sales and profits. However, just leaving money in the bank without a plan is probably a bad idea. 

A financial advisor’s guidance can help with a plan to allocate assets in a truly efficient manner.  From mutual funds to ETFs, stocks, and retirement accounts, there are myriad ways to ensure a small business owner’s money works hard.

 

Financial Advisors Help You Plan Your Exit and Retirement

A small business owner can’t own their business forever.  The day will eventually come when they will exit their role and segue into the golden years of retirement.  However, it is not enough to simply hand off the business to a family member and start collecting Social Security.  By relying on a financial advisor for guidance a small business owner can create a truly strategic exit from the business, be it in the form of a sale, ownership transfer, or another method.  

A financial advisor can help a business ensure it is properly valued at the date of sale while mitigating any potential negative impact on hardworking employees as well as tax obligations.  Once the business is sold, the focus will be squared on retirement.  However, the focus should not be on the daily management of investments in these golden years.  A financial advisor, such as the professionals at Prism Planning Partners LLC (1) can create a plan following the sale/transfer of a business allowing for invaluable peace of mind.

 

Guidance to Bounce Back From the Coronavirus Pandemic in a Seamless Manner

As noted above, the federal government’s economic stimulus program favored large corporations over small businesses.  However, the guidance of a financial advisor has the potential to steer small business owners in the right direction amidst the chaos.  Ask for assistance from such a professional and the transition period as we emerge from the pandemic will prove easier than expected.  

Even if a small business has minimal cash available, it still makes sense to rely on a financial advisor.  This specialist can help sort through the Coronavirus Aid, Relief and Economic Security Act (CARES) (2) that served up nearly $350 billion available in assistance and loans to small businesses. (3) A financial advisor’s experience and knowledge of this program really does have the potential to help secure business-saving funding.

Make an Effort to Understand Your Customers

Envision life from a target customer’s perspective in the aftermath of the coronavirus.  Customers are likely short on discretionary income, penny-pinching, and looking for deals.  Furthermore, many customers are likely to favor online shopping as opposed to traditional shopping at brick-and-mortar stores that might be laden with the virus.  

If small businesses can make an effort to understand customer needs, and pivot as appropriate they should stand a much better chance of surviving this white swan economic event.  If necessary, consulting with a financial advisor about taking out a loan to ensure your business can remain afloat during and after the pandemic is an option.  A financial advisor can help review all potential financing options ranging from the money provided to small businesses through the aforementioned CARES Act to loans and beyond.  Finding a financial bridge to the future, holding on tight, tailoring services to customers’ nuanced needs and small businesses will make it through this unexpected event.

 

Recognize Life and Business Will be Different Following the Pandemic

Businesses may not go back to normal for months or possibly even a year or two after the coronavirus pandemic ends.  Employees and customers will likely be required to wear masks.  Social distancing in the workplace will either be mandated or strongly advised.  

Most businesses will tap into the power of videoconferencing through live video streaming tools such as Zoom and Skype.  Mentally and physically prepare yourself and your business for these changes and the transition to the “new economy” should prove that much easier.

At Prism Planning Partners, we are CERTIFIED FINANCIAL PLANNERS ™️ professionals committed to facilitating your important questions so that we can help you explore all of your many opportunities. We offer a broad array of financial planning and consulting services for our clients-including estate planning. 

Contact us (4) today and let us illuminate your possibilities! 

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Prism Planning Partners, LLC dba Prism Planning Partners is an SEC Registered Investment Adviser. This article was produced by Paladin Digital Marketing, an entity unrelated to Prism Planning Partners and may not necessarily reflect the expertise of this financial advisor. This publication is not intended to provide investment advice and is intended for your information only. Opinions and forward-looking statements expressed are subject to change without notice. Information based upon third-party sources and data are believed to be accurate and reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All domestic and international rights are reserved. No part of this publication including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Prism Planning Partners. Neither Prism Planning Partners, nor its investment advisor representatives provide legal or tax advice. Please be advised to consult your investment advisor, attorney or tax professional before making any investment decisions. 

 

Sources:

  1. Prism Planning Partners https://prismplanningpartners.com/small-business-owners/
  2. IRS: Coronavirus-related relief for retirement plans and IRAs questions and answers https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers
  3. NBC News “Small-business loan program just hit its $350 billion cap and is now out of money” April 16, 2020: https://www.nbcnews.com/business/business-news/small-business-loan-program-just-hit-its-350-billion-cap-n1185406
  4. Prism Planning Partners https://prismplanningpartners.com/contact-us/