Question: Chris, My husband is part owner of a small business with his 3 brothers. What started out as a hobby in a garage, has grown into a full-time business supporting ~5 people including 2 of his brothers full-time. My husband’s involvement is part-time evenings and weekends while he maintains a separate job. With our two full-time jobs (separate from the family business), my husband and I are in a better position than the other siblings to invest in the business. As their business expands and grows there are plenty of opportunities to invest financially in the business. Although I want to be supportive of this growing small business, I am uncertain how much risk we should take. I’d like to get some impartial advice for our situation. I’d like someone who can look at our entire portfolio – saving, retirement, etc… to help us set some goals and determine how much investment into this business would be a good idea. Would working with a financial planner be a good idea? How do we find one? Laura, Rochester, MN
Answer: What is it about garages and entrepreneurship? David Packard and William Hewitt started their company Hewlett-Packard in a garage. Apple paid its early dues in a garage. The Google co-founders set up workspace in a garage for a time, too. It’s cool.
It’s a smart move to look for professional financial advice. You have a lot going on, with potentially great rewards and downside risk.
You’ll want to set it up so that you participate in the business but limit the exposure of your household finances to risk. I definitely think you’d gain some insight and ideas consulting with a certified financial planner (CFP). And many financial planners are entrepreneurs themselves.
How do you find one? In this lengthy post I laid out the insights of Ross Levin, one of the nation’s top financial planners. I think it’s one of the best guides to finding a financial planner–well worth reviewing.
As he says, the best way to find a planner is by networking. Talk to neighbors and colleagues that use a financial planner and get their recommendations. You can also go to the website of the National Association of Personal Financial Advisors. Another resource is the Financial Planning Association..
I’m biased toward fee-only planners with a CFP designation. You’ll want to seek out planners with a strong client base of entrepreneurs. Once you have found several potential fee-only CFP candidates, the deciding factor is which financial planner you’re most comfortable with.
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