Best Practices, Feature, Operations, V6I2

Successful and Unprepared

(Photo by Scott Graham on Unsplash)

Congratulations! You are successful. Business is good. Your efforts have not been wasted. After many years pouring time, money, and emotion into your shed-building business, it has borne fruit. The organization is profitable. Growth is steady. Operations are smooth. The business culture is strong, and stakeholders are happy. 

By most any measuring stick your organization is deemed an American success story. 

In this second column in a series on business planning and growth from Blythe CPAs & Advisors, we’re getting personal. The link between your personal and business financial life is inseparable, and they need to work in concert. Below are a few thought-provoking questions that any successful business owner should feel confident in answering. 

• Have I devoted the same amount of effort and intention into my personal financial situation? 

• Have I discerned separate and distinct financial goals for me and my family from those of my business?

• Is my personal balance sheet well diversified, or am I “all in” with the business I created?

• Have I set aside cash for opportunities in the future? Or for a time period where economic conditions aren’t as prosperous?

• Will my family be well taken care in the event of my untimely death or disability?

Don’t delay beginning to address the realities that these questions represent. President John F. Kennedy once said, “The time to repair the roof is when the sun is shining.” Successful businesses didn’t happen by chance. The same is true of personal financial independence. 

If there is one piece of advice that you should take away from this article, it is this: Every successful business owner should engage a qualified financial professional who understands the interlinked business and personal aspects of your unique financial situation. When selecting an advisor, seek the best. Ask for referrals from other business owners, interview several prospective advisors, and ask tough questions. 

There is not an all-knowing advisor with every answer. At times, an advisor should leverage the expertise of another professional. For example, we don’t offer legal services to draft estate planning documents at our firm. However, we do start many estate planning conversations with our clients. Your advisor should highlight the need and coordinate various aspects of financial planning, provide input during the process, but rely on specialists when needed. 

Related to the questions posed earlier, consider these key concepts to improve outcomes in your personal financial situation.


Take the time now to develop a personal financial plan. It’s never too early to do so. 

The plan should be a concerted effort in written form. It should document your goals, identify financial strengths and weaknesses, and cover all material aspects of financial planning such as retirement, tax reduction strategies, investment planning, a risk management plan, and estate plan. 

A good plan defines realistic financial goals. For example, if a client at the age of 40 says they would like to retire at 62 but hasn’t aggressively saved for the first 20 years of their career, it is unlikely that they will be able to accomplish this unrealistic goal. A well-designed plan helps to shift a client’s expectations for the future by considering various alternatives. 


Everyone has a limited amount of financial resources. It is something we can all relate to. Future goals and dreams simply wouldn’t exist if we had the resources to fulfill them immediately. 

The balancing act of how to use financial resources is the art of financial planning. Focusing too many resources in one single area, including your shed-building business, may prevent you from realizing success in another. I am not suggesting that entrepreneurs shouldn’t invest heavily in their business; after all, business ownership is where wealth and prosperity is created. However, the personal financial goals of your family must not be ignored. 


If your established and successful business doesn’t sponsor a qualified retirement plan, it should. If you have a qualified plan but don’t maximize your contributions, you should strive to. 

Access to, and participation in, a retirement plan provides many tax advantages such as asset diversification, creditor protection, and goodwill to retain employees. Keep in mind there are many options for business owners who sponsor a retirement plan that go well beyond the scope of this article. Seek professional advice to optimize a plan that works best for you and your business.


Everyone has heard the adage “Cash is King.” It’s the truth! It is imperative that adequate cash reserves are available on both your business and personal balance sheet. These reserves should not be commingled. Each should be kept in separate bank accounts because they serve very different purposes. 

On your personal balance sheet, an emergency savings fund should be established and maintained for the unexpected sickness, disaster, or lack of business income for your family. Rely on your advisor to help determine how much is appropriate based on your circumstances, but a common rule of thumb is not less than three months of normal living expenses.

Cash in excess of your emergency savings fund may be diverted to other goals such as retirement planning, debt reduction, or business investment.


What are the areas that need protection in your life? Depending on your age and circumstances, they are likely your ability to earn an income to support your loved ones. Certainly this also consists of your accumulated net worth, including your home and other real estate, possessions, and business interest. 

Various forms of insurance such as health, life, disability, personal property and casualty, business owners and liability must be carefully reviewed to ensure a solid risk management program. Current policies should be periodically benchmarked with bids from other providers to ensure competitive rates. 

In summary, understanding and coordinating the vital link between the successful business and your personal life will make a major impact in your financial success. If you can’t handle this on your own, seek the help of a professional that is qualified to coordinate the unique aspects of your needs. 

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