Author: Jennifer Brazer

Business risk is something that might prevent a business from reaching its business goals. The risks associated with a general business are vast and comprises things that can only be controlled by a business, like a strategy, and few things that are not controllable, like the global economy.

There is a stable relationship between reward and risk. Commonly it is impossible to gain any business without going through any risk. However, risk management’s purpose is not to eliminate the risk.

In some cases, risk management aims to improve the risk-reward ratio while staying within the limit of a business’s tolerance. Here are twenty business risks every business owner should know.

1. Competitive Risk

Competitive risk is the risk that a competing business will get more growth and leave the other business behind while beating the same business every single time.

2. Economic Risk

Economic risk is the potential for changes in the economy that might increase a business’s expenses or decrease overall sales.

3. Operational Risk

Operational risk is the risk of failing in the company’s daily operations, especially in customer service processing. Few definitions of operational risk state that it is the failure to meet the daily tasks. However, processes that are thought to be completed and effective also give a bit of risk.

4. Legal Risk

With legal risk, the chances are that new laws will cause interruption with the current business or might suffer heavy costs and losses due to an authorized argument.

5. Compliance Risk

With compliance risk, the chances are that a business will break the rules or guidelines. In many cases, a business might ultimately intend to follow the law but, in the end, violates laws because of ignoring errors.

6. Strategy Risk

The strategy risk is the risk that comes up with a specific strategy. Though strategies are generally used to improve business, they can also bring about business risks.

7. Reputational Risk

Reputational risk is the chance of losing sales because of a decreasing reputation arising due to incidents or practices that are considered disrespectful, dishonest, or incompetent. The term is bound to define the risk of confidence loss in an organization instead of a slight decline in reputation.

8. Program Risk

The program risk is the risk that is associated with a specific business program or project portfolio.

9. Project Risk

The project risk is the risk that comes up due to a project. Projects’ risk management is a comparatively mature discipline that is protected in chief project management methodologies.

10. Innovation Risk

Innovation risk is the risk that applies to inventive areas of a business like product research. Such areas might need adjusting your risk management practices to relatively high-risk and fast-paced activities.

11. Country Risk

The country risk is the exposure to the situations in the countries in which a business operates, like the economy and political events.

12. Quality Risk

The quality risk is the possibility that a person might fail to meet the quality goals for your products, business practices, and services.

13. Credit Risk

The credit risk is the risk that comes with clients failing to pay back the amount they owe a business. For many businesses, this is generally related to the accounts’ receivable risks.

14. Exchange Rate Risk

Exchange rate risk is the risk that occurs when a country’s currency is converted into other currency types; as such foreign exchange rates affect the business’s transactions and assets value. Many international businesses go through such type of risk as they can secure more sales in other countries, but their sales do not generate much revenue on currency conversion.

15. Interest Rate Risk

The risk that the business will have to pay more on returning the debt with the change in interest rates. As interest rates directly influence the capital cost, ultimately resulting in influencing the profitability of the business.

16. Taxation Risk

The taxation risk is the risk with the potential for new tax laws or interpretations to result in higher than expected taxation. In some cases, new tax laws can completely disrupt the business model of an industry. The possibility of additional tax laws or changes in the tax higher than expected, and in a few cases, new tax laws can destroy the business’s financial model. They can cause chaos on a financial scale in an industry.

17. Process Risk

The process risk is the risk associated with a specific process. The process inclines to be focused on risk administration to decrease risks in basic business processes, often giving out reductions in costs and generating additional profits.

18. Resource Risk

The resource risk is the risk of failing to accomplish the objectives due to a failure of resources like financing or the skilled workers’ labor.

19. Political Risk

The political risk is the risk of political outcome and events affecting the business.

20. Seasonal Risk

The seasonal risk is when you own a business whose sales go up only in a specific season, like a ski resort business.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The S-Curve is traditional art used in a number of fields by start-ups and other companies, which focus on technology and innovation to produce products. The s-curve illustrates that newly introduced technologies seek issues to meet the user’s demands. Consequently, it develops gradually to attain those expectations.

The introduced technology takes a dominant place, and the previously introduced technologies go into a decline. The S-Curve determines the difficulties that firms can address in a technological life cycle. The technological advancements introduced in the following case aim to improve the current customer service system’s efficiency level within the banking industry.

From the banking industry perspective, the bank can use the small branch of Instagram to increase customer convenience and reduce the time consumption of customer service employees. The following system can also be used to omit unproductive activities, which can increase and enhance performance and save time and money.

It can increase the innovation and advanced technological system in the company’s operations. Furthermore, the small branch on social media can be used to conduct some advertising activities. Firms resort to advertisement and promotions by using various platforms of social media. Social media has become a great, cost-efficient way to market your company and brand. To market their products and services, organizations leverage social media usage, which is becoming an increasing trend. Firms can seek more traffic using this platform as compared to other advertising mediums, including print media, Television, and others.

A declining position is also examined in s-curve to maintain a technological innovation. The decline demonstrates that technological innovation can be postponed. Therefore, it is important that previous technology should be integrated with the new ones. The technology introduced by the bank in terms of small bank branches can be referred to as a mature technology, as today social media websites have many visitors, and it is used almost everywhere in the world. However, the following innovation in the company’s technological structure will decline if the company does not properly focus on updating this system and bringing consistent innovation.

The S-curve can be used to suggest possible improvements in processes and technologies for the progression. However, several problems can be addressed while initiating the technology. Within the context of the selected case, these setbacks can be in terms of improper information provided through the small branch, which could dissatisfy the customer and increase employees’ time consumption to provide service to each of the customers. Therefore, it is important that the information should be properly updated, and employees should use innovative advertisements to use the following system.

Time-based Process Map

Furthermore, it can also be used to implement technological improvements to enhance its productivity, and the management can generate higher sales and enhance the bank’s profitability and reputation in the market and in front of its customers. However, certain limitations can also be addressed with the application of S-Curve. Through the S-Curve, it can be demonstrated that a thin line between the beginning of technological improvements and the implementation phase can address certain issues for the management to implement the planning into practice. There is very little distinction between the implementation phase and the initiation phase. Therefore, the S-Curve is limited in managing the improvement expectations.

It has been determined that many of the employees are included in the communication to provide information to each customer.

Conclusion

Thus, it can be concluded from the above study that management can address technological improvement by employing the use of the small branch Instagram, which was mainly aimed to attract customer traffic through the social media website.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Since the 1970’s the U.S. has been plowing financial experts from all over the world, especially in the arena of finance, auditing, and banking. In terms of cost of living, the US market is not only a crimeless sanctuary. Still, it is also the primary bread-earner for the expatriates, who remit their savings to support their families living in developing countries. The US market did not only absorb the influx of expatriates but also industrialized its manufacturing and service sectors through technology and automation. In terms of its regulated infrastructure and civil framework, the growth of the US has been exponential. With the advent of the new millennium, the US has been proactively strategizing in expanding its financial hub, which is why the enormity of accounting, banking, and auditing is an expansionary phase that provides lucrative amenities to serve the needs of the non-locals.

As far as the significance of internal audit predates, it has functioned as a basic yet fundamental process. Unlike any other administration department, an internal audit serves as an internal regulator, whose purpose encompasses scrutinizing documents, reconciling accounting assets, and frequent informing of any anomalies to the board members.

In the U.S., the importance of internal audit function has gained momentum in the recent year, particularly when speaking of International Financial Reporting Standards (IFRS), financial record keeping, and overviewing the financial statements. The scope and dependency have gained prominence in the bank’s core management. Nearly all kinds of banks in the US have concluded that internal audit’s physical presence is embryonic in cultivating the administration of tangible and intangible assets in the banking sector, steering recuperated financial productivity of financial institutions.

There are various objectives and embodiments of internal audit, and utmost compliance with different frameworks is of paramount importance. In actuality, the bank’s audit committee and the board of directors are, in principle, accountable for employing effective management systems at all levels. The onus and magnitude of internal audit within the bank circumvents in gauging the risk of any banking transaction or activity, such as maintaining Capital Adequacy Ratio (CAR), Cash Reserve Requirement (CRR), procedures for opening up consumer and organization accounts, and approving loans to consumers and entities.

In any bank, the function of an internal audit serves as a liberated unit. The overall objective of having an internal audit is to fortify the business operations of the banks. Furthermore, augment it through the activities of assurance and consulting when it comes to business process re-engineering. Thus, implying that it does not act as a support function but as an enabling unit that adds value to enhance the organization’s performance. It compels the management and stakeholders to take a holistic view by adopting a scientific approach in implementing innovation. It empowers the human resource to be inoculated with discipline, integrity, and creditability. The fence of audit control has no boundaries, as it is able to diversify its implementation in enhancing the effectiveness of the risk management process and corporate governance.

The Board of directors and management steering committee in banks have also given sole independence to an internal audit. They provide a transparent and unbiased purview of the bank’s financing performance. Furthermore, auditors also provide suggestions to boost performance and improve efficiency while minimizing time-consuming tasks. They may also come up with the novelty of generating extra profits by resorting to alternate income streams.

The spectrum of internal control should not be restricted and necessitate the desired requirements of the top management. The purposes of having this division are; to assess if the prevalent framework is in conjunction with the infrastructure of the bank, scrutinize each process and product if it is cost-efficient or not, and ensure uniformity and integrity of financial reporting and business operations.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

When in the early stages of a business venture, one will most definitely have money on their mind. When creating a product or service and getting ready to launch a brand, a successful entrepreneur knows the first step in transforming a small business startup into a successful global empire is identifying your target market and using the most advanced and practical strategies to grab their attention.

Successful marketing can result in a significant jump in your website and physical traffic. Marketing is how you feed your company, drive sales, and grow your client base. Why would you not want to know precisely what you are doing so you can do it in the best possible way?

Find a profitable Customer base

While the concept is simple, it is the most difficult and the most critical step in your business venture. To successfully tap into today’s competitive market, you must clearly identify your target audience and niche. Focusing on a specific group or category helps to create your brand image. In this stage, you also want to research consumer habits, interests, and behaviors to develop marketing strategies people are interested in and will respond to.

Marketing to your Target audience

The majority of people aged 20-50 spend almost all of their day online, so staying up to date with the most recent technology trends and being connected to the most popular social media platforms will be important in developing an online presence. We will look more specifically at how to launch your brand online effectively. First, let’s compare today’s digital marketing tools with more conventional methods of advertising.

Some of the most effective traditional marketing strategies today include TV commercials, billboards, printed ads in newspapers, mailers, and coupons. If your customer is in the older age demographic, it will be appropriate to have an offline marketing plan as well.   Although these still exist, they are boring and outdated when compared to all of the creative and innovative ways to market your brand and sell your product today.

Also… technological advances also allow digital marketing tools to be more user-friendly and accessible for older folks. You can’t really track how effective a billboard on the roadside will be, and you must wait much longer for business to arrive at your doorstep. In the meantime, your competition is getting all of the attention and enjoying the immediate results. Don’t let the grass get greener on the other side and take advantage of these key benefits that digital marketing provides entrepreneurs when launching a brand……

Costs less

For new companies with a minimal marketing budget, the cost of creating a website vs. producing a television commercial is obviously less. Instead of spending money on multiple campaigns, you can focus on a single digital platform to get started. As you expand and there is more demand for your service, your company will experience a business concept called “economies of scale,” whereas production increases. The cost of advertising per unit decreases.

Reach more people

Utilizing the digital market space ensures you will reach more potential customers. The world is at the tip of your fingers. Not only are you able to attract new customers, but you can establish brand loyalty and advertise to your current customer base. You can also communicate via online chat software to get real-time responses and feedback, ensuring great customer service and satisfaction.

Trackable results

Digital marketing tools are trackable. Through analytics and data from your social media platforms, you can see what strategy is most effective and the customers that are being driven to your website and business.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Many companies find it necessary to implement travel into the business. There are multiple reasons an employee might travel for the company, but all need to be successful. Depending on the company’s size and the budget, travel and business trip preparation might be organized by a member of the staff or the traveling employee. The company might commission a professional travel agent or agency. Each company has to determine the company’s needs or individual business trips to decide if a professional travel agency should be used. Here are some things to consider when determining if you need a professional travel agent to plan your business trip.

Corporate Travel and Regulations

If the company does not have a travel professional that knows travel regulations, it could be a problem when the time to travel arrives. When the company does not intend to plan travel, not all that organize travel have a financial guarantee or tourism approval for organizing all-inclusive trips. Although they are in charge of organizing activities for business professionals, tourism professionals’ use is necessary for setting up the trip.

Working with a specialized agency then commits the company to the employees. Therefore, it is essential to go through a professional in the field who can offer you a personalized trip adapted to your group. Here are three reasons a professional travel agent can be the right choice.

1. Suppose the goal is not to do business during this trip if you are a business owner who plans a “relaxing” trip to create a relationship of trust with your employees. However, if there is an expectation of some business and some relaxation in the combination, you need to ensure there is a balance.
2. This trip’s success lies in the atmosphere and the dynamic created at the heart of the group. Please choose a destination that lends itself to your business trip’s organization and determine activities aimed at building a relationship between your employees or customers.
3. Choosing original stays. The discovery of a destination and its culture can be organized around unusual or thematic activities (e.g., wine tasting in Porto, discovering Ireland; mystery seminar). This trip generates good memories for your company and your employees.

Why use a travel professional?

The travel professional will be in charge of setting up and assembling all the group travel services in the chosen destination. It will take into account your business’s specifics and guide you in the organization of a trip adapted to your needs.

There are various organized company trips, and each has its specificity:

• Incentive trips to motivate or reward your teams
• Seminar trips to create cohesion and team spirit in your business
• Team-building trips to build a team and thus allow you and your collaborators to get to know each other to create a close-knit and efficient team

The advantage of having recourse to a tourism professional’s advice is to propose to your collaborators or customers a complete offer and adapted to the main objective of the stay and benefit from security in the organization before, during, and after your trip.

For companies without a works council, managers lack time in setting up such a project. These corporate trips’ objective is to create a relationship between the manager and his employees and not to leave the management of contingencies to the manager. Organizing such a group trip is not for everyone; it is better to leave this mission to travel professionals: it is their job! Going through an agency offers the employer the opportunity to leave with a free mind and focus on his team.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

If you are a small business owner and have not established a succession plan, now is the perfect time to start. You can facilitate the change of ownership of your business by paying particular attention to succession planning. A Prince Edward Island potato producer-only started talking about his retirement at the age of eighty after being diagnosed with dementia. His case is no different from many other small business owners who have not established a succession plan.

By taking action now to establish a succession plan, you can help keep your business running smoothly. When the time comes to pass the torch, adopting a prudent exit strategy will allow you to preserve the value of your business – as well as your legacy.  Here are five questions business owners should ask when planning succession for the business.

Why is planning important?

A good plan allows you to maintain good relationships with your employees and business partners, which can be particularly important if your family members are among them. You should also make sure that your business is reliable and has good prospects for the sale price you want. 

Succession planning helps you:

• Protect your business legacy
• Ensure the continuity of service in your community
• Adding value to your business
• Ensure the financial security of your family and your partners
• Preparing for the unexpected (illness, accident, death)
• Preparing for the future

A change in management can also cause problems for employees, suppliers, and customers. Ensure your strategy includes a communication plan for your business partners and team members to keep all parties informed during the transition. It is also essential to make sure that the smooth running of your business continues.

When should you start?

If you plan to leave your business in the next five years, you should start planning now. Even if your business is newly established, having a plan allows you to prepare for the unexpected, good business continuity planning. Experts say the transition process can take up to five years and even up to ten years when it is a family business, depending on the organization’s size and complexity.

In a family business case, the relationships and emotions involved can complicate matters since most people are uncomfortable talking about things like age, death, and finances. According to Susan Ward, an experienced business writer and business owner, 70% of businesses don’t survive the transition from founder to the second generation. In most cases, the factor for failure is a tax or family conflict, two things that can be addressed in a good family business succession planning plan. 

Who is the ideal candidate to replace you?

Whether you want to transfer your business to a family member, employee, or an external third party, you will need to think about the skills and qualifications that a person will need to acquire to run the business, a process that can take years. Once your successor is chosen, a transition plan will take into account the training he needs.

What support will you need?

You don’t have to fend for yourself. Experts are available to assist you with succession planning. Professionals’ use is essential to small businesses’ success, including transferring to another owner. They offer knowledge and expertise in areas that you may not be familiar with. They can also complement your management team to keep your business running efficiently.

As an entrepreneur, you could benefit from the services offered by four types of professionals:

• Accounting
• Lawyer
• Financial planner
• Financial security advisor

What is your succession plan?

The choice of your successor, your business structure, and the collaboration with one of these specialists will facilitate the transfer of your business. By determining how you will transfer your business – whether, for example, to a family member or through a cash or financing sale – it will be easier to establish a program to follow to make room for the next generation. And with the helpful resources available to you – and many of which are free – the best time to plan for the future is now.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In owning and operating your business, chances are at some point; you will need to take out a loan to fund your business for various reasons. Since your business is already established, lending institutions will use your business reports to evaluate the risk. Often banks will reject your loan request after reviewing your business report. Here are four reasons banks reject your business loan application.

Lack of Confidence in the Entrepreneur

The lack of confidence in the entrepreneur is one of the most important parameters in granting a loan. If the bank does not believe in the entrepreneur’s capabilities to carry out the project or if the bank has doubts about the reputation, they won’t approve any size business loan. The entrepreneur’s profile and their attitude in contact with the bank are therefore key.

Note that the entrepreneur’s history can have a strong impact on this trust, both positively (and negatively (e.g., in the event of a past bankruptcy or delays in repayment of credit). As a business owner, you should focus on building credit and reputation from day one of opening your business.

Lack of Confidence in the Project

Above all, a project must be easy to understand, hence the importance of presenting it well, in a synthetic, structured, and understandable way for an uninitiated. The project must integrate different strategic elements, such as (attention, this list is not exhaustive):

• presence of a real need, a real business opportunity
• a real understanding of the market and the ecosystem, including the competition
• solution representing a real differentiated value proposition
• products/services validated in the market
• well-defined target audience, segmentation, and distribution channels
• adequacy of the commercial & marketing strategy for the project
• a clear vision on the planning (milestones crossed, current and future)
• complementary management team integrating the necessary skills
• The project must offer real prospects in the medium term and, if possible, in the long term
• It must be profitable enough to guarantee at least the sustainability of the activity, that is to say, to finance the necessary investments, to support growth, to repay debts, or to absorb fluctuations and unforeseen events
• All of these elements must be argued, consistent, and credible

If the bank does not understand the project, has doubts about the business opportunity, the medium-long term prospects, its profitability, and its viability, it will be very difficult to consider a loan as a reminder, “Credit” means trust.

And remember, you usually only have one chance to make a good impression. A project presented via an incomplete, inconsistent, or not yet completed file risks toast your chances with this bank. This is especially true since it is very difficult for a bank to consider reviewing its position in the event of a negative decision.

Insufficient Repayment Ability

This criterion is essential for a bank:

• If the project does not demonstrate sufficient capacity to repay the credit, there will be no credit
• To measure this capacity, priority is given to actual figures over forecasts. If these are appreciably more positive than history, it is necessary to justify them well, and they may be nevertheless not (fully) taken into account
• Also, particular attention is paid to the regularity or otherwise of the cash flow

The Risks are Excessive

It is worth remembering that a bank developing traditional business services is content to lend them the funds collected from savers or the market in exchange for a limited interest. The bank is an intermediary in managing excess and liquidity needs and does not strictly speak to take risks. Besides, it does not participate in the benefit of its customers.

• Therefore, and this is a fairly common element of confusion, there can be a strong misunderstanding between the entrepreneur and his bank on its role and what it finances
• Typically, things like the life phase of the business, the type of sector, or the innovative nature of a concept will have a big impact on risk
• It deems a starter project at risk, a new concept not yet validated in the market or worse, not yet developed, areas with high default rates, activities with legal risks and policies
• The bank also considers the maximum exposure limits it is willing to take on a business or sector

Based on these risks, the bank assesses whether it can intervene, how high and with what terms, and what protection.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

By: Jennifer Brazer

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

Fact Checked By: Brittany McMillen

4 Essential Retirement Plan Questions Every Small Business Owner Must Ask

I once worked with a bakery owner who assumed selling her business would fund her golden years. But when she finally got a professional valuation, she learned her ovens and equipment weren’t worth nearly what she thought—and she had no retirement plan to fall back on. That moment changed everything about her future security.

If you’re a small business owner, your retirement plan isn’t a distant “someday” problem—it’s your day-one survival strategy. Failing to ask the right questions will cost you money and potentially your future security.

Key Takeaways

• Your choice of retirement plan affects your tax strategy—match it to your team size and goals.
• Your business is a retirement asset—know its real value, timeline to sell, and how to optimize the transition.
• Tax benefits are powerful but risky; avoid penalties with smart systems and regular compliance checks.
• Retirement timelines need flexibility—adjust for life changes, market shifts, or unexpected exits.
• Employee-friendly plans boost retention and your own savings potential.

What Type of Retirement Plan Aligns with My Business Size and Goals?

Choosing a retirement plan isn’t just about saving money—it’s about finding an option that works with your business structure.

Here’s what I’ve noticed over 15+ years advising business owners: Many pour money into plans their business isn’t built to sustain. You don’t need a giant 401(k) if you’re a one-person operation. Still, understanding the benefits of a 401(k) plan can help you make an informed choice. If you’ve got a small team that changes seasonally, flexibility becomes key.

According to Pew Research, only 57% of private-sector firms with fewer than 100 workers offer a retirement benefit plan, compared to 86% of companies with 100+ workers. This gap shows many small businesses miss opportunities to secure their future.

Whether you’re hiring your first employee or managing a lean team of ten, here’s how the most common plans compare:

Plan Type	Best For	2024 Contribution Limits
SEP IRA	Solopreneurs or <5 employees	Up to 25% of comp, max $69,000
SIMPLE IRA	<100 employees	$16,000 (+$3,500 if 50 or older)
Solo 401(k)	Owner-only businesses	$69,000 (+$7,500 catch-up if 50+)
Safe Harbor 401(k)	Teams that want no compliance hassle	$23,000 + 3–4% employer match

 

To get the complete details on all available options, check out the IRS guide on best retirement plans for individuals and small businesses.

📌 Real Talk: A tech startup I worked with had 10 employees and adopted a Safe Harbor 401(k). It saved them on administration, passed compliance checks automatically, and employee contributions jumped 20% in two years. That’s good plan design in action.

How Will My Business’s Value Fund My Retirement?

If you’re banking on your business being your nest egg—you better know exactly what it’s worth.

The problem? Many owners overestimate value and forget to factor in market timing, taxes from a sale, or whether there’s even a buyer for the business when retirement comes knocking.

According to Fidelity Investment research, 83% of small business owners worry about affording retirement, with 48% believing they simply cannot afford a plan. This concern often stems from overreliance on business value rather than diversified retirement savings.

Here’s what you can do today:

• Get a third-party business valuation (not your buddy’s guess or a back-of-napkin estimate).
• List all assets: not just inventory or location—think intellectual property, client contracts, even domain value.
• Don’t put all your eggs in one business: Aim to keep no more than 70–80% of your net worth in company equity. Consider self-employed retirement alternatives to diversify your future income.
• Explore seller financing if you plan to pass the business to a child or employee. This creates a reliable income stream after exit.

Remember, even the best retirement plan won’t save you if you don’t protect your biggest retirement asset—your business itself.

Am I Maximizing Tax Benefits Without Compliance Risks?

Here’s where it gets tricky—and potentially expensive.

I had a client once contribute $10,000 more than the SEP IRA limit. You’d think that would work in their favor. Nope. That one mistake triggered an IRS excise tax—plus hours of accounting fixes. The solution? We added payroll automation with contribution limit controls.

To stay compliant while maximizing tax advantages:

• Check 401(k) nondiscrimination rules if you’re running a traditional plan. Failing these tests can cost big.
• Choose between Roth and Traditional IRAs depending on your tax bracket—lower income years might be the best time to switch to Roth.
• Audit all plan fees. Flat-fee plans often beat asset-based ones in small businesses. Learn more about maximizing home-business tax benefits for optimal financial planning.

Understanding your plan’s fee structure is critical—research from BCG Benefits shows excessive fees can reduce an employee’s retirement savings by 25% or more over their career. Find comprehensive guidance on retirement planning strategies to minimize fees from the Department of Labor.

💡 Tip: Roth conversions can work exceptionally well for business owners with variable income. If your revenue dips, it might be the perfect time to convert traditional IRA funds to Roth accounts for long-term tax advantages.

What Happens If I Retire Later—Or Earlier—Than Planned?

Life throws curveballs. Market dips, health issues, or just wanting to hand the reins over sooner than expected—it all happens.

Flexible retirement plans and backup strategies are essential. Here’s how to protect your future:

• Build a 12-month emergency fund outside of retirement accounts. This gives you room to wait out downturns without raiding your 401(k) early.
• Include profit-sharing in your 401(k) plan to incentivize long-term employee loyalty—especially helpful if you’re phasing out and need operational stability.
• Review and revise your buy-sell agreements annually. This ensures ownership transfers quickly if something unexpected happens.

You don’t just want to retire—you want to retire on your own terms, with the lifestyle you’ve worked hard to build.

Bonus: How Do I Balance Employee Benefits With My Own Retirement?

This question challenges many owners. Based on my experience, here’s a win-win approach: Use auto-enrollment with annual contribution increases.

Your employees win because they save automatically—with rising contribution rates each year. You win because it bumps plan participation rates, which keeps your plan compliant and unlocks richer features for you—like profit sharing or higher contribution caps.

Research from EBRI confirms this approach works—check out their 401(k) plans auto-enrollment research for the full data. The numbers don’t lie: auto-enrollment substantially increases participation and savings rates.

According to BCG Benefits, 90% of small firms that offer retirement benefits believe it positively impacts employee morale and retention. This makes retirement plans a competitive advantage in both recruitment and keeping your best talent.

Start with this simple setup:

• Auto-enroll at 4%
• Increase 1% annually
• Cap at 10% unless they opt out

When done right, your retirement plan will make your employees loyal—and help your own savings grow faster.

12-Month Retirement Plan Checklist

Let’s make this real. Here’s what your upcoming year could look like:

🗓️ Quarter 1

☐ Audit your existing plan for hidden fees and compliance gaps

☐ Compare 401(k) provider costs against flat-fee options

🗓️ Quarter 2

☐ Get a professional valuation of your business

☐ Identify and document all non-obvious assets (goodwill, recurring revenue, IP)

🗓️ Quarter 3

☐ Maximize annual contributions and check for SEP or IRA limits

☐ Evaluate a Roth conversion if income is lower than usual

🗓️ Quarter 4

☐ Update your estate and succession plan

☐ Confirm your buy-sell agreement reflects your current intentions

Conclusion

A retirement plan isn’t just a financial vehicle—it’s your roadmap to freedom, security, and legacy. You’ve built a business with hard work and determination. Now it’s time to ensure it takes care of you in return.

Start today by asking these four essential questions—and answering them with action. You’ve spent years building a business; now invest the same energy in securing your future.

Need help aligning your books with retirement goals? Visit Complete Controller for bookkeeping, controller, and financial management services that make retirement planning simpler and more strategic.

FAQ

What’s the easiest retirement plan for a solopreneur?

For solopreneurs, a SEP IRA is typically the simplest option with minimal paperwork and administration. If you want higher contribution limits or the ability to borrow from your contributions, consider a Solo 401(k). Both allow you to contribute up to 25% of your income or $69,000 (2024 limit), whichever is less.

How much should I be saving for retirement as a business owner?

Aim to save 15–20% of your business’s net income at minimum. Focus on tax-advantaged accounts first, then consider additional investments. Your goal should be replacing at least 70-80% of your pre-retirement income. Since business owners often have variable income, save more during profitable years.

Can I have more than one retirement plan at the same time?

Yes, you can maintain multiple plan types, but total contributions typically max out according to IRS guidelines. For example, you might have both a Solo 401(k) and a traditional IRA, but your combined tax-advantaged contributions can’t exceed annual limits. Consult a tax professional about your specific situation.

What if I can’t afford to match employee contributions?

Consider a SIMPLE IRA, which requires only 2–3% matching and offers year-to-year flexibility. Alternatively, a traditional 401(k) doesn’t require matching, though it does face annual nondiscrimination testing that may limit your own contributions if employees don’t participate enough.

How do I protect my retirement if my business fails?

First, keep retirement accounts legally separate from business assets. Structure your business (LLC or S-Corporation) to limit personal liability. Diversify investments outside your company—ideally, your business should represent no more than 50-70% of your total retirement assets. Maintain separate emergency savings to avoid early withdrawals from retirement accounts during business downturns.

Sources 

• BCG Benefits. (2025-01-24). “What’s Keeping Small Businesses From Offering Retirement Plans.” Retrieved from https://www.bcgbenefits.com/blog/small-businesses-retirement-plans
• Complete Controller. “The Benefits of a 401(k) Plan.” Retrieved from https://www.completecontroller.com/the-benefits-of-a-401k/
• Complete Controller. “Self-Employed Retirement Alternatives.” Retrieved from https://www.completecontroller.com/self-employed-retirement-alternatives-to-increase-the-pension/
• Complete Controller. “Maximizing Home-Business Tax Benefits.” Retrieved from https://www.completecontroller.com/maximizing-home-business-tax-benefits/
• Department of Labor. “Understanding Retirement Plan Fees and Expenses.” Retrieved from https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/understanding-retirement-plan-fees-and-expenses.pdf
• EBRI. (2022, May). “401(k) Plans Auto-Enrollment Research.” Retrieved from https://www.ebri.org/docs/default-source/fast-facts/ff-401k-11-may22.pdf
• Fidelity Investment. (2023-05-11). “Despite Concerns About the Future, Two-Thirds of Small Businesses Do Not Currently Offer Retirement Savings Benefits.” Retrieved from https://newsroom.fidelity.com/pressreleases/fidelity-study–despite-concerns-about-the-future–two-thirds-of-small-businesses-do-not-currently-o/s/72432825-233e-4a33-a470-3bed305b2f04
• Internal Revenue Service. “Retirement Plans for Small Business.” Retrieved from https://www.irs.gov/pub/irs-pdf/p560.pdf
• Paychex. (2024-11-14). “Retirement Industry Trends To Watch for 2025.” Retrieved from https://www.paychex.com/articles/employee-benefits/retirement-trends
• Pew Research. (2024-07-25). “Small Employers’ Economics of Offering Retirement Savings Plans.” Retrieved from https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2024/07/small-employers-economics-of-offering-retirement-savings-plans

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

A person looking to build an investment portfolio needs proper advice as a beginner. This is a vital part of the progress, and every amateur investor must acknowledge this benefit. Novice financiers are searching to invest in a company’s stock but do not know if it will be fruitful to their portfolio. For a beginner, differentiating between profitable and non-profitable investments can be clearly understood using these four guidelines:

The total price of the company vs. the price of the share of company

While researching, it is important to know the company’s share price and know the price of the entire company. The amount of incurring the whole organization is known as market capitalization, or in short market cap. This is the term commonly used by financial experts. On adding debt to the market cap, it becomes enterprise value. In short:

Market cap = (the price of all remaining shares of common stock) x (the estimated price per share at any given period)

For example, a business having one million remaining shares with a $75 stock price of every share have a market cap of $75 million which is:

(1,000,000 remaining shares) x ($75 price per share) = $75,000,000 market cap

Market capitalization tests can help prevent an individual from overpaying for a specific stock. For example, take the case of General Motors and eBay during the primetime of the internet.  During a time of rapid growth, eBay incurred the same market cap as General Motors Corporation. With this in view of fiscal 2000, General Motors got a profit of $3.96 billion, but eBay made only $48.3 million excluding stock option expenses.  When buying the share of either one, a person was required to pay the same amount. It is nearly impossible to believe that any smart investor will pay the same price for both company’s stock. The general public, however, was shocked to make a quick profit and easy cash.

An alternative tool to aid in understanding the stock’s relative cost is the price-to-earnings ratio. It produces a valuable standard for comparing different investment opportunities.

Are the stocks being bought back by the company, with a decrease in outstanding shares?

The important part of the investment is to understand that an industry’s total growth is not important compared to the growth per share. An organization might have the same sales, revenue, and profit for continuous five years, but the company can provide better returns for investors by reducing the number of shares.  A pizza helps make this process easy to understand. Think of an individual investing in a large pizza, and every slice of it represents a single share of stock. It is now up to that person to choose between twelve and eight slices. Any rational person will go for eight slices to get bigger pieces and more cheeses and toppings as compared to twelve slices. The same language applies to a business. A shareholder must focus on investing in a company that is reducing its number of outstanding shares. This way, every stakeholder will have a chance to earn higher returns resulting in a bigger share in the company. A company cutting its shares to a limited number offers higher chances of more ownership and greater profits. Sadly, a lot of management teams focus on building a domain instead of increasing shareholder’s wealth.

Reasons for investing in the company

Before an investor adds up a company’s stock in their portfolio, it is important to ask why the share is being bought from that company. Is it due to an emotional attachment to the company’s product or services, or is it for the risk associated with the investment? Being clear about the reasons behind investment decisions is important as it helps a person work toward and build a budget, including it.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Build a strong base

Marketing is a broad aspect of any business, so conducting a successful marketing campaign is vital. A marketing campaign is a push that generates traffic for the business. At present, there are many marketing platforms available for a business to utilize. Breaking into the content writing industry is desirable to most writers, but there are important facets to keep in mind. Having a solid base plan is essential to generate a profitable content marketing campaign, which will provide a strong base for promoting content writing.  

At some point in the content writing career, an individual must tell the audience what he is trying to achieve with his skills and for what reason he is doing it. This is what helps define career success and whether the audience will continue to follow and support the cause or not.

How to get heavy clicking on ideas available on the website

A content marketer’s job is to build a campaign that does not lose interest quickly and has a wide range of valuable content concepts.  There is no doubt accomplishing this goal can be difficult.

Take out pen and paper and write down the answer to the following questions, as they can indicate an individual’s content marketing goals.

• How will content marketing contribute to business growth?
• How much time will it take to reach specific goals?
• How will content marketing work in collaboration with other marketing platforms?
• How to deliver the underlying message of business?
• How to be competitive with other content?
• Is the content something special or out of the ordinary?
• Is it unique enough to get attention?

Decide the targeted audience

In order to write content that people will read requires it to be unique; however, such an approach will only work when the audience is well known. The reading level depends on an individual’s interest, and with this understanding, a content writer can capture the attention of the targeted audience.

A simple approach is to find a niche and continue to narrow it down.  Even after narrowing down the niche, it is important to be precise and begin writing content about it.

Even after such precision and planning, it is important to check if the niche is practical and if content marketing is desirable for an individual to write. After all the evaluations, it is crucial to focus on the type of customers the marketing campaign will draw. Furthermore, where is the target audience located?   

Making the content highly productive is important because a productive campaign will draw customers without needing too much additional marketing material or manpower.

Have a planned strategy

Developing the content for maximum productivity can be achieved more efficiently with a strategic plan. The plan must contain the core message aspect, and it must revolve around the decided content. While planning a strategy, it is important to be focused on the type of content, for example, a blog, newsletter, magazine article, webinar, infographic, e-book, etc. Furthermore, be sure to include the publishing schedule in the plan.  The timeline should be accurate and reflect agreed upon publishing dates on a weekly basis, daily, three times a week, etc. 

For what technology will it be published?

Ensure where the content will be published and if it will be a hardcopy, softcopy, or both. Knowing the publishing platform will target different audiences, which will further help estimate the success of the content.  

Content management

Delivering content in an organized manner is important, as it will help the readers easily search for specific content. Make channels if there is a need to target a different audience or various niches of the content. Create a smooth workflow that will help achieve objectives professionally and make the content accessible for every reader.

In the end, the main objective of content marketing should be to promote the individual’s content and generate traffic. After all, the main idea behind marketing is to engage customers with the given content’s services and generate more sales on behalf of the content owner.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.