Financial Planning for Entrepreneurs & Executives: Your Financial Plan as a Strategic Plan

Submitted by: Jude Boudreaux, CFP®

All the Best,I’ve worked with dozens of business owners and executives as clients who have a really solid grasp on the companies that they are responsible for, but unfortunately that control often ends when they leave the office. At home, they may feel that they don’t have the time, energy or resources to invest in steering the direction of their personal financial future, or they feel that since it is so closely tied to the financial success of the companies that they run, they are one in the same. 

I’m here to tell you that’s just not the case. 

When discussing financial planning with an owner or executive, I like to frame the discussion in terms of a strategic plan. Successful executives can usually articulate a vision of where they’d like their company to be in 5 to 10 years quite clearly, but they can rarely answer with the same clarity what they’d like their family situation to be like in that same time frame. I believe that the financial planning process can help clients clarify their strategic direction, and ultimately help them get more from their companies than just a paycheck or a dividend. It can be the vehicle with which they can create the future they want, but only if they take some time regularly to decide and review what they want that future to look like. 

Strategic plans can include many different steps, but for our purposes I recommend 5 steps here.

1. Mission & Vision. Everybody has an opinion about mission statements and their effectiveness. If you can, set this aside for a moment and think about what your vision for your personal future is. If you don’t want a mission statement for your family, how about a list of values? What things are truly important, that can help your family frame your decisions? If you have a hard time defining specifically what you want those to be, some people find it easier by starting first with defining what they know they DON’T want, and then taking things from there.
   
   
2. Perform a strategic analysis. There are several different acronyms that can be used to perform a strategic analysis, but a commonly-recognized and simple one is the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. If you had to perform a quick SWOT analysis on your family’s financial situation, I bet you could come up with a few compelling points rather quickly. Maybe the business is young and saving for retirement is a weakness, but the growing value of your company is a strength. A year-end dividend due to good performance throughout the year is an opportunity, and the potential need to care for parents is a threat. Brainstorming on these four points about your personal financial situation for even 15 minutes can provide lots of insight with a very small investment of time.
   
   
3. Set a direction. Nothing in business or life is certain, but you must have a direction to head in if your goal is to make progress and move forward towards achieving anything. Do you want to retire in 10 years and live on the beach? Maybe you do what you love and never want to retire, but you’d like to scale back the hours you put in over the next few years and hire somebody to manage the company. Maybe it’s finally time to take that two week vacation that you’ve been promising your spouse for years. Your unique goals can be accomplished, once they are clear enough.
   
   
4. Determine action steps. Now that a direction is established, what are the next actions required to reach each goal along the way? If saving for retirement is a priority, contact your financial advisor or accountant for their recommendations. If you’re not clear on what you’re spending your money on at home, setting up a system to track your expenses one weekend, and then setting time aside every week to maintain the system, can improve your chances of success. Break each big project down into a smaller task list, and get to work on those tasks (or delegate when appropriate).
   
   
5. Execute. Financial success or failure doesn’t happen overnight. As one of my mentors says, “life accumulates.” Reaching financial success is a series of making sound decisions on a daily and weekly basis. Those good weeks end up as good months, and then as good years. This is particularly daunting for those with many years before retirement, since the goal can seem so far away on the horizon. Small steps, over time, will start to show success over time and will lead to achieving your ultimate goals.

Going through the process outlined above can be done in less than an hour, but can have a tremendous impact on your financial future. Set aside an hour to think, dream, and plan for your family’s financial future this weekend.

Jude Boudreaux, CFP®
Director of Financial Planning
Bellingrath Wealth Management
New Orleans, LA