Can an entrepreneur nurture a business and a family? Both demand time, energy and commitment. At times, these two aspects of life can seem mutually exclusive. Still, many entrepreneurs achieve a balance and do both well. How do they do it?
We asked Don McDonough, regional executive at Merrill Edge, to share his thoughts on work-life balance.
Q: Is work-life balance realistically achievable between the competing demands of a family and a business?
Bank of America studied this question in a recent survey and found that 82% of small business owners believe they had achieved a work-life balance. But nearly 20% admit that they struggle to do so, and 46% admit to taking on too many administrative tasks.
This may be a reminder that the best business owners and entrepreneurs recognize that their businesses can and must run effectively without them. This means creating systems to ensure a consistent standard of customer service, sales engagement and people management whether or not the entrepreneur is physically present. Additionally, setting up a professional support system can free up time to run the essentials of the business as well as allow more time for family.
Q: What can an entrepreneur do to manage stress that a business and family inevitably create?
Very simply, entrepreneurs should set goals for both their business and their family, and revisit these goals regularly. Families need goals to thrive just as much as businesses do. Let’s say a couple’s life goals include funding college education for three children, lifestyle maintenance, buying a second home and retirement planning. Once those life goals are known and defined, annualized financial targets can be established which, in turn, give a business its cues to generate a level of income required for long-term investing and saving. Also, having investments in line with life goals can go a long way toward creating a comfort level about family finances and desired lifestyle.
Let’s say a couple’s life goals include funding college education for three children, lifestyle maintenance, buying a second home and retirement planning. Once those life goals are known and defined, annualized financial targets can be established which, in turn, give a business its cues to generate a level of income required for long-term investing and saving. Also, having investments in line with life goals can go a long way toward creating a comfort level about family finances and desired lifestyle.
Q: If a business is increasingly profitable does that mean more money should be saved for retirement?
Given the prevalence of retirement underfunding along with tax and compound interest benefits, saving more for retirement invariably is a good decision. But the answer depends entirely on projected household income, life goals and work-life expectancy. On this last point in particular, Merrill Edge found that younger generations plan to work well into retirement, which is a complete 180-degree shift compared to today’s retirees’ attitudes toward employment. Any financial advisor would tell you that this is a huge variable relative to a retirement plan. The bottom line is that business owners and entrepreneurs should consult legal and financial experts so retirement is better aligned with their life goals.
Q: How is retirement planning different for women entrepreneurs?
Women must consider the fact that they traditional live longer than their male counterparts, so their assets will likely need to last longer. A financial advisor can help women entrepreneurs plan for those extra years with a personalized investment strategy built around goals. An advisor can also help determine the best time to claim Social Security and retirement benefits.
Q: What can entrepreneurs take from their business lives to benefit their family lives?
Families should consider creating a mission statement for the same reason businesses do: to make its purpose clear.
Holding family conversations around questions like, “What does our family stand for?” and “What aspirations do you have for the family and for yourself?” help identify values that better define life goals and better ensure a family legacy.
For example, a family mission statement centered on continuous learning and education can set the tone for saving and investing decisions as well as other key life decisions like a career change and community involvement. When you weigh the benefits, family mission statements can be as important as company mission statements.
Don McDonough is a regional executive at Merrill Edge.