Business owners’ issues go beyond ‘mom and pop’ label

Long version

If you own a small business, you typically don’t get a lot of recognition – so you may be pleased to learn that March 29 is National Mom and Pop Business Owners Day. You might not necessarily think of your business as a “Mom and Pop” operation, but it certainly contributes to the well-being of your family now, and possibly to that of future generations, too – if you make the right moves.

Depending on the nature of your business, you may have spent the past several months more concerned about today than tomorrow, given the serious economic repercussions of the COVID-19 pandemic, which is still placing stress on a great many business owners across the country.

If your business has been adversely affected by the pandemic, you might be eligible for a Paycheck Protection Program (PPP) loan. To learn more, and to start the application process, visit the Small Business Administration website at www.sba.gov. You have until May 31 to apply for a PPP loan. Other relief also may be available.

But regardless of whether you apply for one of these loans, you can take other steps to help maximize the benefits you get from your business – and perhaps even extend its longevity.

Here are a few suggestions:

  • Establish a retirement plan. If you don’t already have a retirement plan, it’s never too late to set one up. As a business owner, you have several options, including an “owner-only” 401(k), a SIMPLE IRA and a SEP-IRA. All these plans are fairly easy to establish and can offer potential tax advantages, as well as providing you with a source of retirement income in the future. You may want to work with a financial professional to pick the right plan for your needs.
  • Coordinate your business assets with your investment portfolio. Like most business owners, you may have a great deal of your personal wealth tied up in your business. And, as the past year has certainly shown, this can be risky. Consequently, you’ll need to weigh this risk factor when deciding on investing in your retirement plan or in other investment accounts. This doesn’t mean you should try to avoid all risk only by pursuing the most conservative vehicles – which would be counterproductive to achieving enough growth to meet your retirement income goals – but you will need to pay close attention to your investment mix to ensure it provides you with an appropriate balance to what you’ve invested in your business.
  • Develop a transition strategy. How will you make the transition from business owner to the next phase of your life? Will you sell the business outright? Will you gradually transfer it to a family member? If so, what mechanism will you use? It’ a good idea to have these types of plans in place well before you need to enact them, so you may want to consult with your financial, legal and tax advisors soon.

A “Mom and Pop” business may sound quaint and carefree – but, as you know, running a business of any size can be an all-consuming endeavor and always involves significant financial concerns. Get the help you need to meet these challenges.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, Member SIPC

Number of words: 537 

Short/radio version

PSA: Business Owners’ Issues Go Beyond ‘Mom and Pop’ Label

TBA: March 22, 2021

Words:184 (excluding FA’s name, address/phone number)

If you own a small business, you typically don’t get a lot of recognition – so you may be pleased to learn that March 29 is National Mom and Pop Business Owners Day. However, despite the mom-and-pop label, you can face some complex financial issues – so you’ll want to make the right moves. 

Of course, making it through the COVID-19 pandemic may have been your biggest recent challenge. Once you’re on the other side of it, think of how you can help maximize the benefits you get from your business – and perhaps even extend its longevity.

For starters, if you haven’t already established a retirement plan, such as an “owner-only” 401(k), a SIMPLE-IRA or a SEP-IRA, start exploring your options.

Also, review your investment portfolio. Much of your money is already tied up in your business, which entails some risk, so you may need to balance this out in your other investments.

Finally, think about your succession plan – how will you eventually transfer your business?

Consult with your tax, legal and financial advisors on these issues. And there’s no time like the present to begin. 

This is (FA’s NAME), your Edward Jones financial advisor at (Branch address or phone #).

Member SIPC