A Q&A with Brian Speers, Merrill Lynch: Wealth building strategies for small business owners

Updated 5/16/2022 8:41 AM

May is National Small Business Month, a time to recognize the contributions of small businesses and celebrate the entrepreneurs, founders and visionaries who represent the bedrock of our economy.

Despite myriad challenges and disruptions stemming from the COVID-19 pandemic, thousands of Illinois small business owners have continued the important work of innovating, cultivating and constructing a brighter future. But all too often, the future they're helping to build focuses so intensely on their employees and customers that they forget to plan for their own.


Brian Speers, a wealth management adviser with Merrill Lynch for more than 30 years, works closely with business owners and entrepreneurs, helping them plan for their future and build wealth. We asked him what small business owners are doing right and where they can lean in to turn their businesses into their legacies.

Q: What is the most prevalent financial challenge facing small business owners in today's economy?

A: Without a doubt, the answer is hiring and retaining talent. Today's labor market is as competitive as we've ever seen it, and business owners must rise to the challenge. The next generation of employees is motivated by making meaningful contributions to the company and feeling aligned with its values, not just the size of their paychecks. Smart benefits packages that include stock purchase plans, profit-sharing, and even pathways to ownership will become increasingly successful retention tools.

Q: What can owners do today to change their wealth-building potential?

A: Too many small business owners do not have enough money saved for retirement. If they aren't contributing a minimum of 10% of their earnings into a retirement plan, they are missing an important tax-advantaged opportunity to build wealth. Owners should research the retirement savings programs and tools available to them and their employees, such as simple IRAs or simplified employee pensions (SEP), which are easy to set up and serve as a great wealth-building tool.

Q: What do business owners need to know as they approach retirement?

A: As we've seen, many small business owners dedicate their lives to building and advancing their businesses, but they don't put enough thought into how they will transfer or sell those businesses in the future. In reality, this is where wealth is most often created. I advise owners to align with their beneficiaries to determine what interest they have in being involved, and to meet with a financial adviser to map out a strong succession plan that reflects their goals. The key is for these conversations to happen well before retirement, as the unexpected loss of an owner could mean crippling estate taxes for beneficiaries if plans are not in place.

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Q: What's one thing most business owners wish they had done differently?

A: Everyone wishes they had a rearview mirror, but that's not reality. I urge my clients to plan for the unexpected, even when they would rather direct capital toward today's challenges and opportunities. I suggest identifying three things that could derail your business in the next 6-12 months and making sure you have the tools to weather them.

Set up a rainy-day savings account or secure an auxiliary line of credit. Review loan agreements to ensure you know when the bank can call in notes. Don't let a new market competitor or even a pandemic dictate your ability to survive financially.

On the flip side, make sure they're well-positioned to capitalize on opportunities that arise. Foster relationships with people who believe in you and cultivate those relationships with any free time you have. After all, you never know when a valuable investment or partnership opportunity will materialize.

• Brian Speers is a senior wealth adviser with Merrill Lynch and managing director of The Speers Group, which serves business owners, corporate executives and high net worth families across the nation. He is based in Oak Brook.

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