Kyle Playford, CFP®
January 6, 2025
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As we enter 2025, running a business has never been more complex. There are many unknowns that are hard to plan for, including economic uncertainty and the impact of artificial intelligence.
In this environment of uncertainty, we see the most successful business owners laser-focused on controlling what they can control. If you’ve built a successful business, you’ve already proven your entrepreneurial abilities. Now it’s time to ensure your business success translates into personal financial success. Here are five essential steps to enhance your financial planning in 2025.
1. Get Financially Organized with the Right Partner
The most successful business owners we work with share a common trait: they partner with a financial planner early in their journey. Think of this partnership as adding a financial integrator to your team – someone who helps connect the dots between your business success and personal financial goals.
Just as you focus on running and growing your business, your financial planner focuses on understanding how your business value translates into personal wealth. They act as your financial backstop, helping you:
- Track and maximize your business value
- Integrate business decisions with personal financial planning
- Diversifying wealth outside of the business
- Ensure comprehensive risk management
- Coordinate with other professional advisors
For business owners using EOS (Entrepreneurial Operating System), this relationship works particularly well – your financial planner becomes the integrator for your personal finances while you maintain your role as visionary in your business.
2. Define Your ‘Why’ and Connect It to Your Long-term Vision
Running a successful business demands significant time, energy, and stress management. As we begin 2025, it’s crucial to connect your daily efforts with your longer-term vision. Ask yourself:
- What drives you to put in the long hours?
- How long do you want to continue running your business?
- What does life look like after a potential business sale?
- Would you start another business, or pursue different interests?
Understanding your ‘why’ helps align your business decisions with your personal goals. Whether you’re planning to sell in the next few years or aiming to grow significantly, clarity about your motivations leads to better decision-making.
3. Understand Your Business Value and Freedom Score
One of the most powerful steps you can take in 2025 is gaining a clear understanding of your business’s value. Many Twin Cities business owners we work with are surprised to learn this doesn’t require an exhaustive valuation process – we can help you understand your fundamental business value in less time than you would think.
This valuation becomes even more powerful when compared to your Freedom Score – the amount needed to fund your ideal lifestyle after a business sale. Understanding these numbers provides:
- Day-to-day clarity in decision making
- Clear targets for business growth initiatives
- Understanding of how business value translates to personal wealth
- Motivation to close any existing value gaps
4. Review and Update Risk Management
In our experience working with Twin Cities business owners, risk management often presents the biggest gap in financial planning. As your business grows, your insurance needs evolve. Critical areas to review in 2025 include:
- Disability and life insurance for owners and key employees
- Cybersecurity coverage
- Professional liability protection
- Personal umbrella coverage
A comprehensive risk management review ensures that the business you’ve built remains protected against unexpected events that could derail both your business and personal financial plans.
5. Optimize Retirement Plans and Executive Benefits
With recent ERISA law changes and new legislation, 2025 is an ideal time to review your company’s retirement plans. Consider:
- Whether your current retirement plan design maximizes tax benefits
- If you’re meeting all ERISA obligations
- How to use executive benefits to retain key employees
- Whether a cash balance plan could help accelerate your retirement savings
- Ways to align team incentives with business goals
Taking Action in 2025
As a successful business owner, you’ve already proven your ability to build and run a profitable enterprise. Now is the time to ensure that business success translates into personal financial security. Start with these five steps:
- Partner with a financial planner who understands business owners
- Clarify your personal and business vision
- Understand your business value and Freedom Score
- Update risk management strategies
- Optimize retirement and benefit plans
The most successful transitions we see involve business owners who start planning early. Whether you’re considering a sale in the next few years or looking to grow significantly, having these elements in place provides clarity and confidence in your decisions.
Ready to take the first step? Contact us to schedule a conversation about how we can help integrate your business success with your personal financial goals: 651.797.3532.
