Fort Mill Times

Money Matters - October 1, 2008

For those who own their own business, it's no secret that personal financial security is very closely tied to the success of the business. And with the never-ending task of overseeing day-to-day operations, owners may find it difficult to focus on broader financial issues associated with running a business.

Here is a brief checklist of some of the most important items business owners should consider.

• Qualified Retirement Plan: To help you with the all-important task of planning for retirement -- both for yourself and for your employees -- a qualified retirement plan allows you to build a portion of your wealth independently from your business. For you personally, such a plan offers several advantages. For one thing, you can reduce your personal taxes by contributing to a retirement plan.

Aside from the personal benefits, you may also be eligible to receive a business tax deduction for the cost to establish and maintain the plan, and for the employer contributions you add to your employees' accounts. A good retirement plan will also help attract, reward and keep good employees.

• Compensation: While a qualified retirement plan can be a good start to building wealth for retirement, it may not address all your needs and objectives. In some cases, you may need to provide additional options for the owners or other highly compensated individuals within your business. Though they only apply in limited circumstances, non-qualified deferred compensation plans allow you to address these unique needs through several options. Some plans let executives defer a portion of their compensation, while others let employers provide tax-deferred compensation to this select group. There are also excess deferral plans for highly compensated individuals who may be subject to contribution limits with qualified plans.

You may want to provide life insurance as an employee benefit. In addition, you might consider other benefits such as 529 college savings plans, which can help employees save money to send their children to school.

• Insurance: In business, you face many risks you cannot control. It only makes sense to try to reduce the effects of those risks. Remember, one of the most valuable assets of the business is you. You should have adequate life and disability insurance for yourself, in order to provide financial security for you and your family.

If the owner of a business or a key employee dies unexpectedly, the business could suffer as a result. Key-person insurance can provide cash to help your business continue operating in difficult times, and it may surprise you how affordable it is.

A financial advisor can be one key member of your team to help put your finances in order, so that you can spend your time doing what's most important - building your business.