By Bryan Trugman, CFP

In our experience, business owners tend to be strongest when it comes to managing the cash flows of their businesses, but often tend to overlook some critical areas of their personal finances. We get it. When you wear all of the hats in your business, the decisions you have to make on a daily basis can become overwhelming. It is easy to fall into “firefighting” mode, especially when you are focused on meeting the needs of your clients, customers, and staff. Consequently, a lot of business owners get stuck because they don’t implement strategies to manage their money in a way that could make a real positive difference in their life. Let’s dive into some specifics.

Paying Yourself First

Revenue flows differently in different types of businesses, depending on the revenue model. A lot of times, we see more seasonal businesses whose revenues come predictably in large bursts during a short period of each year, whereas other businesses receive a steady stream of revenue all year long. Some businesses have totally unpredictable revenue, such as attorneys who work on contingency or professional service firms that get paid on a per-project basis. We recommend that business owners compensate themselves in a fair and balanced manner, that gives them clarity, allowing them to achieve their personal and business goals. For example, this balance is imperative for business owners to potentially secure an appropriate amount of disability insurance/income protection insurance, perhaps obtain a desired mortgage, or save sufficiently for retirement.  

Retirement Planning and Benefits

When you work for someone else, the company often “takes care of you” by providing benefits such as medical coverage, life insurance, disability, a company retirement plan, and more. As a business owner, you don’t automatically get these benefits, but there are plenty of options that can be set up. You can realize tax advantages while saving for retirement by utilizing vehicles such as a Simplified Employee Pension (SEP), a Savings Incentive Match plan (SIMPLE IRA) or a 401(k). These various retirement plans also provide protection against creditors in addition to tax savings. In addition, a strong benefits package makes your company more attractive to top talent.

Contingency Planning

The COVID-19 pandemic has exposed a lot of businesses, and the experience has been an eye-opener for many more. Sweeping economic disruptions aside, every business owner needs to have two separate contingency plans in place for their personal finances and for the business’s finances. If revenue dries up, the business should have several months’ worth of cash available to pay overhead expenses. The business owner should also have enough of a personal emergency fund available to cover living expenses. This is part of the reason we encourage our clients to have a healthy balance of money in and out of the business. Quite often business owners rely too heavily on the sale of their business to fund their retirement. We understand rewards come with risk, but concentrating all of your net worth into a single asset creates too much risk. 

Business planning and personal financial planning should be considered as two separate processes. For the owner of a company, the two plans will naturally be interwoven and should be designed to work together. In our experience, personal financial planning is more often neglected, because the tendency is to put everything into the business. We feel strongly that ongoing comprehensive personal financial planning is critical for the financial well-being of business owners and their families.

We enjoy helping our clients delegate the complex process of financial planning and understand their options more clearly. If you feel confused or overwhelmed by the idea of building separate financial plans for your business and your household, let’s talk. Reach out to me via email at or give me a call at (516) 762-7603 to set up a consultation.

About Bryan

Bryan Trugman is managing partner, co-founder, and CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioner at Attitude Financial Advisors. With more than 12 years of experience, Bryan specializes in addressing the financial needs of new parents as they seek to realign their finances, assisting divorced individuals as they navigate an unforeseen fork in the road, and strategizing with those seeking to accrue a dependable retirement nest egg. Bryan is known for being a good listener and building strong relationships with his clients so he can help them develop a customized financial plan based on what’s important to them. He is passionate about helping his clients experience financial confidence so they can worry less and play more. Bryan has a bachelor’s degree in industrial and systems engineering with a minor in mathematics from State University of New York at Binghamton. He has served on the board of the Financial Planning Association and continues to be actively involved in the national organization. He is also a member of the Plainview-Old Bethpage Chamber of Commerce, for which he has served as a vice president and board member. When he’s not working, you can find Bryan on the ballroom dance floor or engaged in a fast-paced game of doubles on the tennis court. To learn more about Bryan, connect with him on LinkedIn.

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