Financial Planning for Business Owners

By  Brian Thorp

Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals who pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

Owning a business offers highs and lows rarely experienced by most people who prefer the relative stability of working for someone else. You have the freedom to choose when and how you work with uncapped income potential. But owning a business can also feel overwhelming and prove to be expensive, time-consuming and a very risky endeavor. 

Therefore, you may forget or lack time to tackle important personal matters such as financial planning with your days and nights consumed by your business. But if you can set aside a little time to make financial planning a priority today, you’ll increase your odds of maintaining an enjoyable lifestyle and achieving your long-term goals. 

Challenges of Financial Planning for Business Owners 

While you may be an expert at running your business and keeping your customers happy, chances are financial planning is not your day to day focus. This is particularly true if you hire employees like accountants and controllers who handle much of your organization’s finances on your behalf. 

The good news is you’ll find an increasing number of financial advisors who specialize in working with entrepreneurs and who understand the unique financial planning challenges you’re faced with as a business owner.

By reading this guide and partnering with an experienced financial advisor, you can establish a financial plan designed to increase your financial stability and reduce the stresses frequently encountered by small business owners. 

Financial Planning for Business Owners

There are a number of topics to consider as well as questions you’ll have when you’re planning your finances as a business owner. Here’s a brief overview:

Living Well on a Business Owner Income 

The nature of your business, industry characteristics and other factors like how long you’ve been around and economic conditions can materially impact your income. It’s highly likely your income fluctuates significantly from year to year.

While you may be tempted to splurge when you’re doing well, it’s essential to do so in moderation. You want to ensure you save for the future and plan for slower times as well as unexpected hurdles you may encounter. 

Here are a few questions a financial advisor can help you answer so you can make the most of your income as a business owner. 

  • How much does my business need to earn each month or year in order for me to meet my financial goals?
  • What are recommended ways to budget with a fluctuating income? 
  • What financial planning insights have you gained working with other business owners and entrepreneurs like me?

Repaying Your Student Loans as a Business Owner

You don’t need to attend college to become a business owner. As long as you have an entrepreneurial spirit, creative mindset, and hard work ethic, you can pursue your own venture. But if you earned a college degree before you took the plunge and decided to become your own boss, you may have student loans. 

Despite how much you owe in student loan debt, it’s vital to design a feasible repayment plan. A financial advisor can help you determine whether you should repay your student loans quickly or prioritize other financial goals instead. 

Making the Most of Your Benefits as a Business Owner

When you work for someone else, you often receive a benefits package that may include health insurance, 401(k) with a company match, and paid time off. One of the downsides of working for yourself is that these benefits are your responsibility. 

You’ll be on the hook for providing yourself, and potentially your employees, with insurance, a retirement plan, and anything else that’s important to you. When you meet with a financial advisor, they can help you answer questions such as:

  • Which health insurance plans are available for a business owner like me?
  • What type of retirement plans should I consider establishing for myself (and/or my employees)?
  • How might I establish a benefits program for my employees?

Buying a House as a Business Owner

It can be tricky to get approved for a mortgage and buy a house as a business owner. This is particularly true if your business is new and you don’t have proof of a reliable income. Obtaining a home loan can also be tough if you lack W2s or pay stubs to demonstrate you’ll be able to repay it. 

A financial advisor may be able to help you turn home ownership into a reality, despite these roadblocks. They may recommend an alternative mortgage option, such as a bank statement loan, that is specifically designed for business owners who may not be able to verify their income via traditional methods. 

Saving for Retirement as a Business Owner

Despite the fact you won’t have an employer-sponsored retirement plan like a 401k unless you establish one for your business, you can still save a lot of money for retirement. Several of the most common retirement accounts for small business owners and self-employed individuals include SEP IRAs, Simple IRAs, SOLO 401ks, and defined benefits plans. You may be surprised to learn that some of these plans will allow you to save even more for retirement than you’d be able to if you worked for someone else.

And of course your business itself has the potential to become your largest asset and major determinant of the wealth you could accumulate in your lifetime.

If you work with a financial advisor, you can design a strategy to help improve your odds of retiring when and how you’d like. You’ll learn answers to questions like:

  • Which individual or employer-sponsored retirement plan(s) should I consider establishing?
  • How much do I need to save to meet my preferred retirement lifestyle?
  • What should my long-term investment strategy entail given my ownership and exposure in this business and industry?
  • What steps can I take now to position my company for a sale in the future?

Expenses and Deductions: Keep More of Your Income

If you own a business, there’s a good chance you have a lot of expenses. One of the easiest ways to reduce how much money you owe Uncle Sam at tax time is to ensure you claim all of the deductions available to you. 

Depending on the nature of your business, you may be able to deduct expenses related to your home office, business travel, depreciation, business use of your car, and much more. 

If you work with a financial advisor, they can help you address questions such as: 

  • Does it make sense to take the standard deduction or itemize?
  • Which deductions am I eligible for as a business owner?
  • How should I keep track of all my expenses? 

Certain questions may be better answered by a Certified Public Accountant (CPA) and your financial advisor can help connect you with a CPA if you don’t already work with one.

Your Insurance Needs as a Business Owner

You’ll need to purchase insurance on your own as it won’t be provided to you as a small business owner. Your business may require you to invest in general liability insurance, professional liability insurance, and workers’ compensation insurance. 

On top of business insurance, you’ll need to pay for personal insurance like health insurance and life insurance. With the right insurance coverage, you can protect yourself from a great deal of financial setbacks. 

An experienced financial advisor can help you consider your options for personal and business insurance policies.

Financial Planning is a Necessity

You work tirelessly to keep your business running smoothly. Therefore, you owe it to yourself and your family to come up with a solid financial plan for your own future as well. 

A financial plan can help you make the most of your hard work and achieve the financial goals you desire. With the support of a financial advisor, you can simplify the process of financial planning and gain some much needed peace of mind. 

Financial Advisors Respond to Business Owner Questions

I’m excited my business is growing, but worried its finances are becoming increasingly complex. What options should I consider and where can I turn for guidance?
Ryan Firth Mercer Street

Ryan Firth

Mercer Street Company

“When you’re a business owner there are two very important things you need to stay on top of: 1.) your company’s finances; and 2). complying with tax reporting and other regulatory filing requirements.

Getting your books in order will help you in numerous ways: from running your business better, to obtaining financing for your business, to, ultimately, exiting the business. If your books are in bad shape (or even worse, nonexistent), it might behoove you to outsource bookkeeping and payroll functions to a third-party. Although it will cost you money (which should be tax deductible), it will save you time and allow you to focus on continuing to grow your business.

Staying on top of your company’s books and records should help make tax time go smoothly, which brings us to point number two. Again, if you find that your time would be better spent running your business rather than handling tax compliance matters, then consider hiring help to take care of your company’s tax filing obligations.

A Certified Public Accountant (CPA) is a licensed professional who can help you with your company’s bookkeeping and tax needs. To find a CPA, you could ask business acquaintances for recommendations, or reach out to your state or local CPA society for several names. Ideally, you’ll want to work with a professional who is familiar with your company’s industry, but it’s not necessarily a deal breaker. Ultimately, what you’re looking for is a trusted advisor who will help you take your business to the next level, which is exactly what a CPA can do for you.”

My business is doing well and I’ve been approached by potential buyers. I’m thinking about retiring soon and considering selling. What should I be thinking about now and where can I turn for help?
Deb Meyer WorthyNest

Deborah Meyer


“Selling a business that you built from the ground-up isn’t cut and dry. You have many options as a business owner, and it’s wise to get strong counsel from an experienced advisor who can help you navigate the complexities of a business sale. In fact, between 70% and 80% of privately held businesses that are offered for sale each year do not ultimately sell.

A Certified Exit Planning Advisor (CEPA) is specially trained to help you maximize the value of your business as you prepare to sell. Some CEPAs are focused on optimizing business operations, but a financial advisor who is also a CEPA can help you figure out an optimal sales price to ensure your personal cash flow and legacy goals are met during retirement.  And if you’re charitably inclined, there are advanced strategies you can take as the business owner to give the most to charities of your choice.”

Enjoy a Secure Financial Future 

A financial plan can give you the confidence you need to spend money with purpose and live a wonderful life. It may also take some stress off your plate and put you on the path to financial security today, tomorrow, and years down the road. 

How To Find The Best Financial Advisors for Business Owners

While you may find a great financial advisor to work with through the referral of an acquaintance or whose office you drive by on your daily commute, it’s important to consider several factors to improve your odds of hiring the best financial advisor for your individual needs.

As a business owner, you may decide the best financial advisor for you is one who specializes in understanding the unique financial planning challenges and opportunities commonly faced by entrepreneurs. These specialist financial advisors may hold credentials that demonstrate their expertise along with considerable experience working with business owners that could benefit your own financial planning needs.

Because many financial advisors can work with you online, you’re not limited to hiring a financial advisor in your neighborhood when the best financial advisor for you may live hundreds of miles away.

In other words, whether you choose to hire a financial advisor who lives near or far, it may be most important to hire a financial advisor who truly understands your individual needs based on their education, experience and commitment to helping people just like you.

You’ll find a growing number of financial advisors on Wealthtender who serve business owners, including advisors specializing in working primarily with entrepreneurs.


Are there financial coaches who specialize in working with business owners?

Yes. While financial advisors are generally best suited to help business owners who need investment advice and guidance, many financial coaches have considerable experience working with business owners whose hectic schedules have meant day to day budgeting and financial habits could use improvement.

Use the Wealthtender Financial Coach Directory to find the best financial coach or counselor for your individual needs.

What are the best finance blogs and podcasts for business owners?

With over 250 personal finance blogs and financial podcasts featured on Wealthtender, you’ll find several that regularly publish articles and episodes with financial planning insights useful to business owners.

We’ve also curated a list of popular blogs and podcasts for business owners offering articles and interviews on a range of topics including financial and career advice:

You’ll also find lots of great resources for business owners in this article published on Wealthtender:

50 Great Blogs for Business Owners in 2021

Do you have a favorite blog or podcast for business owners not featured above? Let us know in the comments section below or by email at yourfriends@wealthtender.com.

About the Author
Brian Thorp, Founder and CEO of Wealthtender profile picture

About the Author

Brian Thorp

Brian is CEO and founder of Wealthtender. He and his wife live in Texas, enjoying the diversity of Houston and the vibrancy of Austin.

With over 25 years in the financial services industry, Brian is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress.

Connect with Brian on LinkedIn

Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals who pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

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