PITTSFORD: Business ownership brings stability and greater financial rewards

In the 1960s and ’70s, many young high school and college graduates thought the smart thing to
do was to spend their career working for a large corporation, then retire with a pension plan, health insurance benefits and
financial security. Today, many of those same people are now worried about their future.

We know many individuals
who have lost more than 50 percent of their pension plan because the corporations they retired from recently filed bankruptcy.
To make matters worse, many of those individuals who had excellent health care coverage for little or no cost are now being
forced to pay several hundred dollars a month for the same benefits.

These days, working for a large corporation
does not guarantee the financial security many people once believed it would.

Owning your own business is more
attractive today than ever, especially if you are in your 20s or 30s.

Yes, owning a business can be complicated
and can be a lot of work, but the benefits of controlling your own destiny and not being at another company’s mercy
for the health of your financial future can make it worth it.

The following are some things to think about when
considering family business ownership:

• More than 90 percent of the 20 million businesses in the United States
are family-owned.

• Six of 10 jobs created are in family businesses.

• 59 percent of our U.S.
gross domestic product is created by family businesses.

• Owners of profitable family businesses have a better
chance of maintaining their job, health insurance benefits and some type of retirement income long term, even during tough
times.

• It’s hard to get fired as an owner of a family business.

If you are not working
in your family business but would like to consider business ownership, it’s usually beneficial to work outside the business
for several years. You can bring fresh ideas, new perspectives and lessons learned back to the business after working elsewhere.

If you already work in your family business and are interested in ownership, and the current owners plan to retire
in five to 10 years, now might be an excellent time to discuss developing a succession plan.

With the current downed
economy and with the value of closely held business stocks falling, younger generations are able to purchase more stock of
their family business for less cost. It typically takes a financial adviser, attorney and accountant working as a team to
prepare a successful succession plan, and three to five years to implement it, so planning ahead is important.

It
has been my observation that owners of family businesses do not implement a transition plan until:

• they
are sure one or more of the children can actually run the company.

• they can design a fair estate plan to
benefit all their children.

• they have a secure and guaranteed retirement income.

• the succession
plan minimizes income and estate taxes.

Graduates from the 1960s and ’70s have learned a difficult lesson
the last couple of years. Younger generations are realizing by watching older generations that family-owned businesses may
be a better option for a secure future.

Over the next five years as the state of our economy improves, millions
of young individuals are going to be taking over family businesses for this exact reason.

Perhaps it will be you.•

———-

Pittsford is president and CEO of Castle Wealth Advisors LLC. Views expressed here are the
writer’s.

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