Wealth creation for the private business owner occurs when cash flow— and where it comes from— is understood. When we work with Clients on wealth creation we start with where you are now, what are your sources of cash, and an understanding of where and how your cash is used. Once we both have a handle on sources and uses of cash, we will develop a plan to increase cash and determine the options you have with your cash.
Wealth creation often includes looking at the cash-generating ability of your business as well as other assets you might own such as real estate, investments, and your retirement plan. Through the use of our four boxes of financial independence, we are able to illustrate in a clear and understandable manner where your cash will come from when it becomes time to leave your business.
Wealth creation also includes an understanding of the value of your human capital as well as your business capital. Human capital is what allows you to generate cash flow. We often model what happens to your family’s cash flow if your human capital has an interruption of any kind. These interruptions might be health issues you might have, or business issues within your company. Both of these interruptions can cause significant problems if they occur.
Wealth creation tactics and strategies often include the following:
- Financial planning through the four boxes of financial independence
- Financial modeling using traditional financial planning tools
- Human capital analysis of the business owner
- Inventory of wealth creation strategies within the business
- Inventory of wealth creation strategies for the business owner
- Retirement planning strategies for the business owner
- Understanding what the business ownerwill do afterleaving the business
- Value-building strategies that increase the wealth and value of the business