Tax Support for Small Business

As a small business owner there are many challenges that have to be addressed.  In addition to launching the service or product you dreamed of rolling out to a welcoming public, the small business owner is constantly inundated with the often mundane tasks of running the business.  If well-funded, the small business owner might have the luxury of hiring people to assist.  Engaging an accountant, lawyer or financial advisor to help with bookkeeping and payroll, business registration and filings or employee retirement plans is often money well spent.  Other jobs can be handled by the owner themselves or maybe by another employee of the company. Small business owners with employees and self-employed individuals know that tax obligations are with them year round.  Most also know there are important deadlines and specific rules to follow.  If unfamiliar with the tax calendar, a deadline is missed or a rule is misinterpreted, these failures can come with negative consequences, many of which are financial.  Regardless of whether a tax related job is outsourced or done in-house, it helps to be prepared and knowledgeable Read on! →

How well do you know your financial adviser?

Assuming you wouldn’t hand over your house key to a stranger on the street, why turn over critical financial decisions to someone you don’t know very well?  If you decide to hire a financial adviser based solely on “feel,” rather than their experience, expertise, and disciplinary background, you might as well have handed over the key to the next passerby. While personality, style and overall “fit” should play a role in choosing a financial adviser, make sure and do your research using a few key documents to fully understand the adviser’s business practices and avoid the regret that comes with making the wrong decision. Every year at this time, advisers across the country are reviewing and revising their Firm Brochure Part 2A Form ADV, Firm Brochure Supplement Part 2B Form ADV, Privacy, Confidentiality and Proxy Voting Disclosures.  These documents describe the firm’s business practices, its key employees and their credentials.  They also serve as annual updates to the various regulatory agencies that oversee the financial services industry. For individuals seeking an adviser or considering a change to a current relationship, Read on! →

Taking Comfort in Diversification

A recent client visit and January’s market drop reinforced a fundamental tenet of how I believe money should be invested.  An investment portfolio should be fully diversified.  It should contain a mix of equities and fixed income that balances growth with preservation, and levels out the peaks and valleys that accompany volatility.  This conviction has sometimes been difficult to support when it typically results in a lower rate of return relative to broad market growth seen in recent years. Experience has taught me that the angst of missing some equity market growth is mild compared to the pain of seeing a portfolio go down in lock step with declining equity markets.  While it is unreasonable to expect investment strategies to be shifted significantly in anticipation of market swings, it is very reasonable to expect to have a basket of different investments that smooth out volatility.  Only by having a mix of stocks and bonds can the investor trust a portfolio to ride market swings and not get derailed before achieving the desired results. There are many ways a portfolio can Read on! →

Liquidity Events Tied To Succession Planning in a Small Business

Recent market strength has increased the value of many small businesses. Increased values often bring succession planning to the forefront as owners see opportunity to cash out when their business value is at or nearing a peak.  If a business is sold, then the challenge becomes what to do with the proceeds. There are many ways a business can be sold.  Two that come to mind are selling the entire business and receiving a lump sum or selling the business in phases, securing payment over several years.  Choosing which is best might be a reflection of the business’ maturity and/or where the owner may be in his or her career cycle.  Consideration must also be given to the type of business and how business cycles influence valuations.  Said differently, if the value has peaked and is significant, an owner may elect to cash out regardless of where they are in their career cycle. When considering a lump sum, a business owner should reflect on whether he or she wants to stay involved and how that might influence the value.  A Read on! →

Santa’s Checking His List, Are You?

In my last blog, I wrote on the virtues of asset class diversification to mitigate risk.  More specifically, taking stock of your equity holdings and deciding how much of their value could be lost.  The goal was to assign a dollar value, instead of a percentage to measure risk. Sticking with a similar theme, my latest reading of The Intelligent Investor[1], lead me to reflect on the importance of checklists in making investment decisions and reduce errors.  Working in conjunction with Clearview Wealth Management’s Chief Investment Officer, portfolio oversight is a critical component of my role as Chief Compliance Officer.  This doesn’t involve making specific investment choices but it does involve working to establish a useful list of decision criteria to help determine when to buy, hold or sell an investment. Too often, individual investors allow subjective criteria play an outsized role in whether to buy, hold or sell an investment.  While instinct may have a place, a checklist of objective criteria should be employed to mitigate emotional bias and provide a higher level of consistency.  Checklists are an effective Read on! →