Date: June 8, 2021

Business Owners: Do You Really Need a Financial Advisor? 6 Reasons the Answer is Yes!

Very often, business owners take on many roles. They’re used to doing things themselves – making personnel decisions, strategizing ways to grow their business, managing their cashflow, figuring out what fires to put out next. But what about retirement?

If you think you’ve got it covered on your own, you may be wrong.

As a business owner, there are several additional pieces to your financial puzzle than the average worker – and there is a lot more at stake if one of those pieces falls through the cracks.

At Watts Gwilliam & Company, we specialize in helping high-income-earning business owners who have more complex financial needs, and in our experience, there are 6 common assumptions that business owners make that greatly affect their future plans. Even high-income-earning business owners can be caught off guard when it comes to the funds they have at retirement.

Unfortunately, we often talk to business owners when they’re ready to retire. They come to us for help selling their business, establishing a smaller role in the day-to-day or passing their company on to the next generation. But regrettably, many times, these successful entrepreneurs aren’t prepared to make their plans a reality.

If you take anything from this article, talk to a financial advisor early! A no-obligation conversation can go a long way.


Don’t be afraid to ask for help. Schedule a no-obligation conversation with the financial advisors at Watts Gwilliam and Company to see how we can help.


Assumption #1: You’ll Work Forever

Especially in the beginning, when you’re first getting your business started, you may think you’ll want to work forever, but what if you change your mind? What if you (or your spouse) decide you do want a break and are ready to spend your retirement seeing the world? What if you develop a chronic illness or disability that prevents you from working? Do you have a plan that will allow you to walk away?

So many overly confident business owners miss this step, assuming they don’t need an exit plan. But you can’t predict the future. We talk to business owners all the time who didn’t plan for these “what-ifs” because they swore it would never happen to them. But then something does happen. And they’re left floundering.

Be prepared. Create a plan. Best-case scenario, you have a solid exit plan and never use it. Worst-case scenario, you end up needing an exit strategy and are thankful it’s there.

Assumption #2: You’ve Got Your Personal Retirement Handled

Another mistake we see business owners make is separating their personal financial needs from their business financial needs. What we commonly see happen at Watts Gwilliam and Company, is these business owners think they’re handling all their financial needs together, but in reality, they only worry about the company’s financial plan and neglect their personal retirement plan.

Many business owners have too much wealth tied up in their company. On the surface, this may not sound like a bad thing. After all, you’re pouring money back into your business to help fuel its growth. But it can actually backfire if your investments aren’t properly diversified.

Working with a financial advisor helps you look over your personal and company investments to ensure your assets are properly balanced.

Check out these recent blog posts:

Why Diversification is Important: Financial Advisor in Gilbert Explains

How to Turn Concentrated Stock Holdings into Income Generators

Assumption #3: You’ll Leave Your Business to Your Heirs

A lot of business owners assume they’ll pass their business on to the next generation, but what if that plan doesn’t work out? What if your children decide to strike out on their own and carve their own paths?

A solid succession plan is at the heart of every good business. It should fit neatly into your overall exit plan, so you have a sound safety net in place for the future of your company and its employees.

A solid succession plan should account for the five Ds: Death, disability, disaster, divorce and disagreements. It should clearly lay out who would step into leadership and how the organizational structure of your business would change if it lost any key employees.

Assumption #4: You’ll Sell Your Business and Live Off the Proceeds

In our experience, high-income-earning business owners especially tend to envision selling their company and living off the proceeds. But do you actually know how much your business is worth? When was the last time you got a valuation?

Many small business owners have rose-colored glasses when it comes to the valuation of their business. And it’s easy to see why. You’ve likely poured your heart and soul into your company. It’s an extension of your family, a child you’ve helped rear up. It’s only natural to want to get as much money for it as possible when you’re ready to sell.

It may make sense to have potential business proceeds as part of your income stream in retirement, but the key here is to be realistic about how much you can expect to get. Don’t assume you’ll get top-dollar. Talk to a financial advisor about how much you’ll need, how much you can expect to get and how much you’ll have to add to your retirement budget from other sources.

Assumption #5: A Lawsuit Won’t Happen to You

You may think you’re protected against lawsuits, disgruntled employees and general liabilities, but what if you’re not?

Insurance is important to help protect your company from risk – that’s a given – but the specific types of insurance you take out should be tailored to your company’s unique needs. That said, here are some common needs to consider:

  • Professional liability insurance
  • Property insurance
  • Workers’ compensation insurance
  • Commercial vehicle insurance
  • Business interruption insurance
  • Keyman life insurance

A financial advisor can help review your business details to determine which type of insurances will help protect you from risk.

Read our recent blog post: Divorce and Retirement: 6 Steps to Protect Yourself on Either End.

Assumption #6: Your Employees are Happy

Another common assumption: You may think you’re offering your employees great benefits, but could you be offering something better that benefits you as well?

Benefit packages can help you and your business succeed just as much (or even more) than it helps your employees succeed.

Choosing the right benefits options can help you:

  • Attract the most talented employees
  • Minimize employee turnover
  • Boost employee productivity

It can even provide you with the largest retirement savings and the biggest tax breaks if you design a plan around your company’s structure and needs.

Don’t half-heartedly choose a benefits package for your company. Take time to do your research and make sure it’s positioning you to reach your long-term goals.

How Watts Gwilliam and Company Can Save You Time and Energy

As a high-income-earning business owner, you surely have a lot to juggle in terms of your company and personal finances. But you don’t have to do it all on your own.

Talk to a financial advisor who specializes in working with high-income-earning business owners and can help you:

  • Ensure you don’t have too much of your personal wealth tied up in your business
  • Create a succession and exit plan for your company
  • Look for strategies to save on taxes
  • Build a retirement plan that benefits you just as much as it benefits your employees

If you’re not sure where to start, let’s talk.

Watts Gwilliam & Company is a fee-only, fiduciary financial advisory firm headquartered in Gilbert, Arizona that serves investors nationwide. Our firm was established to provide a conflict-free environment that’s dedicated to our clients’ success. Our financial advisors provide innovative investment and financial planning strategies so you can build wealth, generate income and secure your future.

Start a conversation.

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David Watts

Dave is one of the firm’s founders. He helps business owners, professional athletes, and other high-net worth clients develop and implement financial plans and strategies. He also specializes in helping those with single-stock positions to diversify and manage their financial lives. Other areas of specialty are wealth transfer plans for concentrated stockholders and business owners; tax minimization strategies for those with employee stock options; cash flow management; and risk management planning.