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Financial Planning for Your Business Future: An Interview with Paul Roldan

Recently, Paul Roldan, Co-Founder of Allgen Financial Advisors, met with Ed Alexander, Founder of Alexander Abramson to discuss financial planning for businesses and entrepreneurs.

Here’s a summary of the interview, as written by Ed Alexander and published on Orlando Business Lawyer.

Over the Hill and to the Moon: Financial Planning for Your Business Future

Most business owners run the day-to-day operation of the business in its early stages. But in order to grow a business successfully, those same owners have to make a transition from working in their businesses to working on their businesses, from employee to owner.

This transition can be difficult, but it’s vital to avoiding a stagnation of the business’ growth. If you can’t make that transition, you will realize that you own a job and not a business—and the worst part is that jobs aren’t scalable!

Identifying your obstacles to making this transition and developing a plan for your business to continue to grow is much easier with professional guidance. Luckily, Paul Roldán and the team at Allgen Financial Advisors, Inc. can provide you with this guidance.

Paul is the co-founder of Allgen, a financial planning and investment management firm here in Orlando, Florida. Paul and I sat down for a very informative talk at the Allgen offices recently. Our conversation covered a broad range of topics, but I was most interested in Allgen’s business financial planning.

I found the conversation illuminating in many respects, and I’m sure you will too!

When to Start Business Financial Planning

While Allgen does investment management and also helps individuals with financial planning, their work with business financial planning intrigued me. I wanted to know how it worked and how it differed from personal financial planning.

Paul explained that with personal finances you can really start planning from day one. But on the business side of things, businesses need to have been up and running for a while, have some infrastructure in place, with a couple of years of steady profit. There are a couple reasons for this.

First, the reality is that a business needs sufficient cash flow and profit margins to be able to implement the advice and strategies Paul and his team will suggest. When you’re running the thin margins of a startup, you just don’t have the leeway. Second, Paul’s team is very data oriented, so looking at your historical performance through your financial documents is going to a big part of how they determine what steps would be best for your business.

In general, the best time for owners to seek out business financial planning services is when they’re ready scale up from a “solo” outfit, bring on a partner or key employee, or build out infrastructure and systems. Strategizing up front is key to being able to implement these strategies successfully.

Three other common points at which clients might truly benefit from business financial planning services are:

  1. Businesses that have seen their growth stagnate or plateau.
  2. Businesses that want to tweak systems, maximize profits, or assess and manage risks.
  3. Businesses that want to develop a succession plan or are getting ready to sell.

Why Business Growth Is a Team Sport

What sets Allgen apart from generic business consultants is their team and educational approach to strategic planning. Unlike a traditional business plan, a bulky document that sits on a shelf gathering dust, Allgen and their clients build what we might call a “business canvas,” which is a constantly updated image for how to improve the company and reach the owner’s goals.

Paul told me that Allgen’s system relies on coaching the business owner and holding them accountable at every stage. They do this through monthly roundtable discussions led by members of the Allgen team and by outside experts on topics ranging from business and financial management, to marketing techniques and employment issues, to succession planning. For example, Ed has presented at previous meetings on business structures and partnership arrangements. Again, the client isn’t given a 30-page business plan to follow and cut loose—they are coached and held accountable to ensure their goals are achieved.

The team approach is a fundamental part of Allgen’s company culture and offers their clients two particular benefits. First, as Registered Investment Advisors (RIA), they don’t work on commissions and aren’t looking for a quick sell. Clients can build relationships with the consulting team and feel they are receiving objective advice.

Not only that, but the Allgen team is an eclectic bunch with a broad range of expertise to bring to bear to help your business develop its strategic plan. Depending on your needs, your consulting committee might have a certified financial planner, CPA, risk management expert, or a market technician. The collaborative approach provides maximum benefits to the client and means there are multiple contact points in the office. According to Paul, “Every client is a company client.”

Good Enough Isn’t Good Enough

Having come from academia myself, one point that I really resonated with was the fact that the Allgen team takes a very academic approach to their subject matter. This was evidenced when the new tax code was released, and they read the proposed law and found three initial contradictions. (You can see this “nerdiness” in all its glory in Jason Martin’s Monthly Market Update videos.)

Some people might think this was a waste of time since they aren’t tax lawyers, but Paul impressed upon me that it was done—as with everything they do—in an effort to put the client first. In the financial planning sphere, Paul says—putting on his technical hat for a bit—advisors are held to two different standards: suitability and fiduciary. Paul admits that sometimes there’s too much suitability floating around, which means that it’s “good enough” for the client. But as an RIA, Allgen is held to the higher fiduciary standard, which means that they must always put the client’s interests first. In other words, good enough isn’t good enough.

Don’t Miss the Boat

If you think you could benefit from professional guidance on business financial planning, be decisive and move forward. As business lawyers and small business owners, we know that running a business is tough. The Allgen team does too. Both of us are here to help your business in our respective spheres.

If you aren’t engaging professional advisors yet, you are certainly missing out on various opportunities for growth and improvement. Inaction will only lead to further missed opportunities and increased stress, which could, ultimately, lead to a failed business venture. Even if you make it through, you will have traveled a much more difficult road to success than you would have had otherwise.

In Paul’s experience, one of the most common reasons business owners procrastinate is an unwillingness to incur another expense, especially if they’ve already noticed their profits leveling off. Paul was quick to shoot this objection down. Financial planning shouldn’t be considered an expense; instead, see it as an investment in yourself and your business. As he did earlier in our conversation, he made it clear that his focus was on the welfare of the client. “I’m just not just here to take your money,” he said, “I want to help you grow. If I’m not helping you grow, then you don’t need to hire me or keep paying me.”

Ask the Right Questions to Get the Right Answers

One of the biggest benefits of bringing on professional advisors is that they can help you re-frame problems or issues in your business you may have already identified. However, because you are looking at these problems from only one perspective, you may not be asking the right questions on how to solve them.

Take, for example, the commonly asked question: “How do I grow my business?” Despite being a question that nearly every client asks him, Paul thinks it isn’t really the right question. In effect, it’s too broad—we need to define what growth means for each client and for each business. Do you want a lifestyle business to run for the long haul or a high-growth venture that you’ll sell in the shorter term? Do you need a strong infrastructure or just good systems to help manage what you already have? “All these aspects impact the answer to the main question and change how you strategize and what steps you’ll ultimately take,” Paul said.

Importantly, neither path is right or wrong, but if you don’t have the right advisors to help you ask the right questions, you may end up implementing changes that don’t match your business goals.

Expert-Level Questions

Moreover, there are questions that you, as a non-expert in a field, wouldn’t even think to ask that can have huge effects on your business outcomes. These questions are where true experts can show their bona fides.

“Success doesn’t happen in a vacuum. You need to learn how to use other people’s expertise. The best way to invest in yourself is to surround yourself with other people that can take you where you want to be.”

For example, an area Paul thinks more companies should focus on is creating the right company culture. Businesses known for their in-house cultures like Google, Publix, and Chick-fil-A have fared very well both because this culture leads to happier customers and because it leads to a higher employee retention rate. While “do I have a good company culture?” may not seem like a question that would impact your business growth, professional advisors know different.

Similarly, while it’s great to be optimistic about the prospect of growth, more business owners should properly protect themselves and their businesses and have risk management strategies in place. The economy is in an upswing now coming off of the Great Recession of the late 2000s. But Paul notes that the various market indicators look suspiciously like they did circa 2001 (i.e. right before the Great Recession), meaning we can expect some kind of recession in the next couple of years.

It’s important from a pragmatic point of view to make sure that if something does happen, your business only takes one step backwards, not ten. While times are good, build up an emergency fund so your business can weather an economic storm. A big part of growing your business is protecting that growth from disappearing.

Parting Words

Paul and I had had a great conversation. As we wrapped up, I wanted to know if there were any parting words of wisdom he had. Without missing a beat, he said:

“Success doesn’t happen in a vacuum. You need to learn how to use other people’s expertise. The best way to invest in yourself is to surround yourself with other people that can take you where you want to be.”

We couldn’t agree more with Paul, and it’s one of the primary reasons behind this referral partner network profile series. We strongly believe that business owners benefit the most when they build relationships with a supporting cast of professional advisors. You simply don’t have the time or cognitive bandwidth to do and know everything. It’s enough of a struggle keeping up with the changes to your industry and the day-to-day operations of your business. You don’t need to worry about keeping abreast of nuanced changes to the tax codes, interest rates, state securities laws, and fluctuations in global economies. Let experts in financial planning, tax law, and business law handle these concerns, while you focus on what you do best: running your business.

If you want to connect with Ed Alexander and bring Alexander-Abramson onto your team, you’ve got a lot of options: