How to Build Generational Wealth for Every Business
If I may borrow words from The Script’s song, Hall of Fame, your business can be the greatest. It can be the champion. It can be the greatest thing to ever happen to your family. Your business, no matter the size, can build generational wealth for your family. I understand that many small business leaders are intimidated because of statistics around us. They fear news such as, “20% of small businesses fail in their first year. 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business,” according to Fundera.
Besides small businesses, large businesses do struggle as well. For most of them, being profitable, paying employees, and taxes could be eating up extra cash flow to expand operations and keep more money for generational wealth. In such a scenario, you end up having small, medium, and large businesses struggling. But, does this mean that business owners and potential ones should be stressed and prepare for failure? I don’t think so – remember, your business can still be the champion in your life.
Why say all the above? It is because both small businesses and large ones can create generational wealth for owners. You could be a sole proprietor, or you could be running a small firm in your backyard. Someone could also be running two or three restaurants in the city, and someone else running a slightly larger business. All of these are capable of creating the much-coveted generational wealth. Having said that, creating and maintaining it is never about the amount of money you make. But, it is all about the level of consistency you show when following specific rules or steps on how to create generational wealth.
The rules or steps of building generational wealth have nothing to do with the size of the business you run. Anyone can follow them and be worth millions of dollars decades later. Therefore, what are the rules for creating generational wealth? See below;
- Hire your child, even when she is seven years, it’s legal
- Pay your tax on time
- Avoid Payroll errors
- Keep your bookkeeping in order and keep your accounting in shape
- Save money for future big investments
- Start saving when you are young, and encourage your kids to do the same
- Be accountable as a leader, and encourage accountability among your employees
- Take courses from time to time to sharpen your skills
Hire your child, even when she is seven years, it’s legal
Small businesses and sole proprietors can hire their children and reduce the money they are taxed on. The IRS encourages this and says it is a very good tax strategy. It is hassle-free. You just got to do it in the right way. I understand that many do not understand what the right way is. But you can get this information from a practitioner, like myself, or anyone of your choice. When hiring your children, age does not matter, as long as she can deliver on the work – it’s totally legitimate.
Pay your tax on time
Many small businesses lose millions to IRS’ penalties because they file their taxes late. I am going to be honest with you; the IRS is not your friend. They will not do any favors for you. If you are going to be late in your tax filing, they will come heavy on you. Those amounts they take can destroy a business. That is the last thing you want because it cuts short your bid to build generational wealth.
Avoid Payroll errors
Hire experts to get a better understanding of the US tax codes and the details of payroll compliance. Failure to do so may result in hefty penalties. Each year, studies show that the IRS fines small and medium businesses billions of dollars due to payroll errors. You surely do not want to be part of that statistic. Working your time cards, overtime, and other payroll details could be tricky, make sure you understand these better.
Keep your bookkeeping in order and keep your accounting in shape
I always say that all transactions you do in business reflect in your bookkeeping and accounting. The IRS taxes you using those details, and they want them to be a true reflection of what has been happening in terms of sales, costs, and revenue. Imagine now having to declare falsely, resulting in the IRS taxing you wrongly. I can assure you, if they decide to come for an audit, they will bust you and fine you massive amounts. These fines gravely threaten your business. If your business dies because of the fines, you won’t be able to build generational wealth. On the contrary, if you do it well, you can get more returns and tax breaks from the IRS. You can use these to reinvest in your business and grow it for generational wealth.
Save money for future big investments
If you can’t buy it today, you can surely buy it tomorrow. That’s the rule when it comes to huge investments that build generational wealth. Therefore, when running a small business, utilize savings to keep the money to vastly expand your business after a few decades, or to buy into another vast business and real estate. More so, you must begin saving when you are young. It gives you more time to set aside more money. If you hire your kids, encourage them to save from a young age. When they are old, this money would be running into millions – enough to start generational wealth.
Be accountable as a leader, and encourage accountability among your employees
All the other points that help you build generational wealth are great, but accountability is mostly needed. Why say this? Because without it, you can skip one or more of the above and still don’t see the need to correct yourself. Accountability is like a glue that makes sure that all your operations don’t break down. Therefore, you must have it when leading your business. It helps you achieve every goal you set towards building lasting wealth.
Take courses from time to time to sharpen your skills
In the above, we mentioned accountability. It’s one of the things you can take a course for. Some people are naturally accountable, but as a business leader, you may need to take courses that teach you how to implement accountability in your business. Besides, accountability is not only the course you need to keep your business growing. You will need a lot more others like bookkeeping, management, accounting and so forth. These are the skills you will use to grow your business as you build generational wealth. Educational Courses help you to have good business acumen; pursue them to assist yourself in building lasting wealth.
Visit bit.ly/hireyourchildregistration to learn more on “How to Hire your Child”.