Business Risk


I always talk to my small business owner clients in Temecula and Murrieta about the 7 major risks that every single American small business faces.

Let’s take a brief look at each one of those.

Number One:  Market Risk. It’s speculative and volatile and people over 45 simply cannot have the lion’s share of their nest egg subject to a catastrophic and unpredictable loss.

Number Two:  Tax Risk. Just look at our national debt, our state debt, and all the underfunded entitlement programs. The government will have no choice but to raise taxes. And what’s more alarming is our local business owners’ and employees’ 401K’s are at greater risk than ever before.

Number Three:  Catastrophic Illness. You’ve got disability, critical illness, cancer, heart attacks, and long term care. Too many local mom and pop businesses would suffer a fatal, if not crippling blow if the business owner or key employee suffered a critical or chronic illness and didn’t die but couldn’t work for six months, a year, or more.

Number Four:  Inflation Risk. According to Forbes Magazine over the past 30 years, the government has changed how it calculates inflation more than 20 times. Think about it. Common sense tells us that if you buy a loaf of bread or gallon of gas today, it costs a lot more than it did 10 years ago.

Number Five:  Spread Too Thin Risk. Being a small business owner is tough. Just getting the business off the ground is hard enough, and then you have to worry about hiring employees, turning a profit, and staying afloat. Entrepreneur magazine noted procrastinating on financial matter as the #1 mistake small business owners make..

Number Six:  Longevity Risk. People are living longer and outliving their nest egg. This is going to put a massive financial burden on all of us. Longevity risk magnifies and multiplies all the other risks.

Number Seven:  Death Risk. What happens to the business and family if you, the small business owner passes away? That’s the first concern I have when I meet with Temecula and Murrieta small business owners and their families  for the first time.

Is it possible that with the right team and right financial vehicles you solve all seven major risks? The financial strategies you implement in the 4th quarter of the year are crucial to your success in the year ahead. Make an appointment to discuss with risks are of the most concern to you and potential solutions to eliminate or mitigate them.