Award-winning Financial Advisor Jennifer Black advises how Business Owners and Managers can avoid common financial mistakes
Canadian business Owners and Managers often limit their company’s potential for financial success through lack of awareness and careful planning, says one of Canada’s top Financial Planning Advisors. “Many business owners and their management teams are unaware of some fairly common financial pitfalls, or discover them too late,” said Jennifer Black, president of Dedicated Financial Solutions, a financial planning company with clients throughout the GTA. “This can incur needless expense or cause other significant problems that could have been avoided with some sound advice and advance planning.”
Black, an award-winning advisor and Certified Financial Planner, has identified five common pitfalls that face Canadian business Owners and Managers, and offers advice on how to avoid them.
1) Be Aware of Capital Gains Exemption: June is the tax filing deadline for businesses; for 2014, the Lifetime Capital Gains Exemption increased to $800,000. Are your shares eligible? The Capital Gains Exemption creates additional opportunities in tax planning, but Business Owners should consult their tax advisor to ensure their shares are eligible before attempting to use the exemption.
2) Protect Your Business through Succession Planning: Many businesses have no Succession Plan in place should one of the owners die, retire, or leave the business. By planning for the loss of an owner in advance, all partners can decide whether the remaining owners can wrap up the business, sell their own interest, allow heirs to take over owners’ shares, buy them out, or use other options. Formalizing these decisions upfront in a Buy/Sell Agreement will give owners peace of mind and ensure a smooth ownership transition.
3) Avoid Double Taxation of your Business: Business owners can avoid double taxation on their estate after death through a comprehensive Estate Plan. “Your shares are deemed to be disposed of upon death, and your estate will have to report the capital gain on your final tax return,” explains Black. “There are three ways to address the problem of double taxation, so be sure to meet with your tax advisor and accountant to go over this aspect of your Estate Plan and choose the approach that’s right for you and your business.”
4) Don’t Neglect Your Personal Wealth Management: Successful business owners are typically high-net-worth individuals with personal financial needs that can be more complex than those of the average investor. They also have little time on their hands, and frequently, their personal financial planning suffers as a result, says Black. “Some business owners focus on their company, then devote limited attention to their personal finances. Some even try to manage their own finances with a do-it-yourself approach. The need for protection through insurance, minimizing personal taxation, retirement planning, possibly trust funds for children and grandchildren, and managing investments, requires a well-qualified wealth management consultant who specializes in high-net-worth individuals.”
5) One Size Does NOT Fit All: Whether it’s a Business plan or Personal Wealth Management, your plan needs to be tailored specifically for your unique situation and goals. What’s right for one company doesn’t necessarily mean it’s a good fit for you and your business. Your financial plan also needs to consider your personal investment timelines, and should be revisited regularly to ensure that changing needs and goals are still reflected properly.
“Through careful financial planning, business owners and their management teams can steer clear of many of the financial pitfalls that can impact their company’s bottom line,” says Black.
Black’s company was recognized at the Mississauga Board of Trade’s Business Excellence Awards last November as the 2014 Small Business of the Year. “We’re a small business who advises other small business owners,” confirms Black. “We understand where they’re coming from and what their goals and challenges are, so we are well qualified to help them choose their path and change their financial future.”
About Jennifer Black
Jennifer Black is President of Dedicated Financial Solutions (DFS), a rapidly-growing wealth management and financial planning company based in Mississauga. The firm is co-owned by Black and vice president Janet Baccarani, both Certified Financial Planners, directing the company’s team of seven specialists.
DFS has earned the Consumer’s Top Choice Award as Mississauga’s Top Financial Planner for the last two years. Black and Baccarani have been award ELITE™ status as one of Canada’s top eight financial advisor teams based on an independent survey of their customers by Elite Advisors Canada Inc. Recently, Dedicated Financial Solutions earned the Mississauga Board of Trade Business Award of Excellence as 2014 Small Business of the Year.