Financial Planning
March 5, 2024

7 Ways Wealth Management for Entrepreneurs Is Very Different

Stewart Willis

Entrepreneurs encounter distinct challenges and opportunities, particularly in wealth management. Conventional strategies often fail to address their intricate needs, necessitating bespoke solutions. Wealth management for entrepreneurs caters to the complexities of personal and business finances.

Entrepreneurs, by nature, have a substantial amount of their wealth invested in their businesses. Consequently, their financial stability is directly tethered to the performance of their companies. This intricate fusion of personal and business finances necessitates a wealth management strategy that is adaptable, dynamic, and fully aware of the entrepreneurial lifestyle.

1. Integrated Financial Planning

Unlike traditional clients, entrepreneurs require a comprehensive financial plan that concurrently addresses their business assets, cash flow requirements, and personal financial objectives. The boundaries between personal and business finances are frequently indistinct for entrepreneurs. The best financial advisors for entrepreneurs adopt a holistic perspective, which considers the entrepreneur's personal wealth aspirations and the fiscal stability of their enterprise. This would typically include:

  • ensuring seamless cash flow between business and personal accounts to meet needs without compromising either
  • aligning personal and business investments to complement each other
  • addressing personal and business risk intersection through comprehensive planning

2. Tax Optimization

The intricate relationship between personal and business finances can often lead to convoluted tax scenarios for entrepreneurs. Small business financial advisors will frequently face these challenges because startups and smaller companies might not invest in proper financial planning solutions from the start.

They can guide you in selecting the most suitable business structure, such as LLC, S-Corp, or C-Corp. This choice influences tax implications for both your business and personal finances. Financial planners will use strategies to distribute income in a way that lessens the overall tax load. They also make good use of tax-favored accounts and investments to lower taxable income and boost wealth growth more effectively.

3. Diversifying Risks

Considering the inherent risks associated with entrepreneurship, wealth management for entrepreneurs concentrates on broadening the entrepreneur's personal investment portfolio. Risk diversification offers a counterbalance, regardless of any business downturns caused by inflation, tight labor markets, rising costs, and market volatility.

Financial advisors for business owners would recommend spreading your investments across various asset classes, including equities, bonds, real estate, and potentially even alternative investments. Insurance offerings can also protect against business and personal life risks, such as a key person or disability insurance.

4. Managing Liquidity

Entrepreneurs frequently grapple with liquidity issues, finding a significant portion of their net worth tied up in their business. The solution lies in effective wealth management for entrepreneurs without jeopardizing the business's growth trajectory. This can be achieved by securing lines of credit or contemplating partial exits.

Maintaining liquidity is not just vital for your personal financial safety. Entrepreneurs must have mechanisms in place that give them access to cash as required without causing any disturbance to their business operations. Wealth management for business owners will help to:

  • identify easily liquidated assets in the entrepreneur's portfolio to reduce potential losses
  • establish credit lines using assets for cash flow support
  • consider partial exits or liquidity events to convert business equity into liquid assets

5. Succession and Exit Planning

Entrepreneurs must have a well-defined roadmap for their business's future, whether that involves passing the torch or selling the enterprise. Wealth managers for entrepreneurs can help create an exit plan for your transition into retirement or the next phase of your life. Succession planning also ensures you have a backup plan should something happen to you.

Financial advisor speaking to young entrepreneur

Who would take over your business? Creating a strategy for business continuity in case of retirement, incapacitation, or death is crucial. This involves preparing potential successors and establishing the necessary legal structures.

Financial planners for entrepreneurs handle various aspects of exit planning, such as valuation methods, identifying potential buyers, and timing considerations. They are here to ensure the best possible outcome for their clients. Experienced planners understand how the transfer or sale of a business can impact your estate. They craft meticulous plans to minimize tax liabilities and facilitate a seamless transition process.

6. Business Debt and Credit Management

Entrepreneurs frequently resort to borrowing to boost their business expansion. This move can significantly affect their finances, mainly if they've personally secured business loans. Wealth management for entrepreneurs should consider the risks tied to this financial leverage and its potential impact on personal assets.

Smart credit management is a must for entrepreneurs since personal credit can influence the ability of a business to secure loans and vice versa. Wealth managers often offer guidance on how to strike a balance between using credit for business growth and safeguarding your personal credit standing.

7. Time Management and Financial Delegation

Entrepreneurs are usually swamped with all their business responsibilities and often find themselves with very little time to dedicate to managing their personal finances. Wealth management takes care of this for the busy business owner.

However, even though wealth managers handle various financial tasks, entrepreneurs should also be fully aware of their financial situation. While you should trust your financial advisor with the nitty-gritty details, they should communicate freely with you and schedule regular reviews.

How Wealth Management Supports Entrepreneurs

Wealth management for entrepreneurs is not just about preserving wealth. Financial planning for business owners must support the growth of their businesses while ensuring their personal financial goals are also met. These are the ways they can help you:

  • Wealth management for entrepreneurs not only frees up resources but also provides you with extra capital that you can pump back into your business. The result? You get to drive growth and foster innovation like never before.
  • Wealth managers can help protect your personal finances. They shield these personal assets from the unpredictable swings of business volatility, offering a much-needed safety net and a sense of tranquility.
  • With a thorough grasp of your personal and business finances, wealth managers are well-equipped to offer insightful guidance on key strategic moves. This can range from plans for business growth to possible acquisitions.
  • A lot of business owners view their enterprise as their lasting legacy. Part of managing their wealth involves careful estate and succession planning. This ensures that the legacy you’ve worked so hard to build is safeguarded and transferred in line with your desires—easing your burden.
  • The aim of wealth management for entrepreneurs is to secure your personal financial stability, regardless of the rollercoaster ride your business might take. This involves preparing for life after work, setting aside funds for children's education, and achieving other individual financial objectives.

Get Tailored Wealth Management

Entrepreneurs need a custom wealth management strategy recognizing their specific hurdles and prospects. Merging personal and business financial planning, wealth managers offer critical assistance to these business pioneers.

At Asset Preservation Wealth & Tax, our tailored method doesn't just protect your wealth, but also fosters the steady expansion of their enterprises, setting the stage for enduring success and financial stability.

Claim your free Portfolio Review!

Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Stewart Willis, providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to and search by our firm name or by our CRD # 175083.

Alternative/Private investments are often complex,  speculative and illiquid investment vehicles that are not suitable for all investors and are typically only available to accredited investors who meet certain minimum financial requirements.  Alternative Investments often engage in leverage and other investment practices that are extremely speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, including the loss of the entire amount that is invested.  They are, therefore, intended for experienced and sophisticated long-term investors  who also have the financial wherewithal to accept such risks.

Ready To Get Started?

You spent all your working years accumulating this wealth. Now it’s the time to make the most of it.