Financial Planning 101: Four Essentials to Conquering Your Balance Sheet

As business owners start to strategize and plan their exit or transition from their business they should take into consideration and work with professionals to create a financial plan, considering the impact of the forthcoming sale of their business. One of the best ways to take control and conquer the process is to fully understand the four key elements of your “personal balance sheet”: (1) account titling, (2) liquidity needs, (3) current and future liabilities, and (4) investment planning.

Account Titling

As a business owner you understand the need for structure and planning to maximize value and growth. This concept can easily be applied to your personal financial planning by using efficient and risk mitigating tactics in your estate planning. Understanding how to protect your assets via various test structures and reduce taxation can help provide for your family in the future.

Liquidity Needs

Once you sell your business and you are not enjoying continual distributions it will be important for you to have strong control of your cash flow needs. Planning for the future and the lifestyle you wish to have post-sale is very important. This planning should take into account the requisite cash reserves in case of unexpected life events and other expenditures to support your lifestyle and reaping the benefits of all the hard work it took to grow and sell your business for its maximum value.

Current Liabilities

In planning your financial future, it is important to consider your current debt obligations and forecast your needs to take on additional debt for funding future capital projects. Understanding your personal comfort with utilizing debt to fund your future projects and the tax consequences of its deductibility can bring your financial plan into greater focus.  

Investment Planning

A key part of everyone’s personal financial planning should be investment planning. Engaging a trusted investment adviser is key to developing your holistic financial plan—allocating your assets into different investments to provide for growth, wealth preservation, of a mix of both.

The legal team here at Jacko Law Group, PC (“JLG”) is experienced in advising business owners through the sale and transition of their businesses. Further, JLG with their Certified Exit Planning Advisor, is able to provide support and coordination among all your professionals to ensure that you have a complete Exit Plan that seeks to maximize the value of your business upon its sale or transition and provide for the financial needs of you and your family.


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