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Kurt Rosentreter, financial advisor, Manulife Securities, Toronto

Small business owners should seek integrated and comprehensive advice in the early stages of setting up and running their company, says Kurt Rosentreter, a financial advisor at Manulife Securities in Toronto.

There is no title for the kind of overall advisor he thinks small businesspeople need. So he invented his own.

"I've labelled myself a family CFO [Chief Financial Officer]" says Mr. Rosentreter, who started out as a chartered accountant. "Most small business owners know a CFO as the person who's their right arm, their key advisor on everything financial. I label the term family CFO because it's bigger than that. "It's not just about the family finances and the business finances; it's about all of it together."

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For instance, levels of salaries and dividends may be affected by what the owner needs to pay for a personal mortgage. "It really should be one master plan builder," he says.

"Typically the other advisors, like accountants and lawyers and bankers, only see their specialty. The accountant may not care what you're putting into your child's RESP [Registered Education Savings Plan]and the banker may not care what amount of personal life insurance you really need. The family CFO is in a unique role to quarterback all the pieces – not necessarily do it all but be the glue to make sure that the goals are being addressed across disciplines."

Some goals may be addressed sooner and others later, he says. "Sure, deciding how quickly you pay down your mortgage or whether you're going to make a contribution to your child's RESP or your RSP should be in the middle of the process. Part of this whole process is understanding the evolution of a business owner."

Not many small business owners take an integrated approach to planning when they're starting out, says Mr. Rosentreter. Business owners are usually "so focused on generating revenue that even the basic accounting or legal work might take a back seat for several months or years. Often business owners tell you, 'if I don't make money, what's the point of the rest of this?'"

But doing the proper planning helps set the foundation for success, he argues.

In accounting, for instance, an owner has to decide whether to incorporate or not. "Deciding whether or not you're going to get an 'Ltd.' or an 'Inc.' after your name may not be the first thing you think about, but it will help you manage legal risks." There are important decisions to be made around whether to hire employees and how to handle the payroll. "If you're paying people and you're not properly remitting CPP [Canada Pension Plan]and EI [Employment Insurance] CRA [Canada Revenue Agency]will be after you pretty quickly. Beyond that, life insurance and disability insurance shouldn't wait because you never know when something bad is going to happen." An accountant helps set up the company's structure "and really becomes a partner along the whole way."

Where to find an advisor who can see the forest and all its trees?

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"Some financial advisors are just insurance people, others are just investment people and they all get compensated in different ways," says Mr. Rosentreter. "It's really a case of the small business owner asking, 'What are your disciplines? What are your specialties?' And knowing what they're looking for."

Small business owners should also ask potential advisors how they bill for overarching advice.

"You can pay for it like an invoiced service – say, $100 or $200 an hour. That way it's clean, it's simple, it's a visible fee. Or you can tie into other services. Some financial advisors would say, 'okay, if I'm managing your money, I'm already receiving compensation, here's what it is and for that I can also include a business advisory service to help you overall.'"

Mr. Rosentreter describes himself as the "plan builder, the big-picture guy who integrates all the advisors, integrates all the planning and helps make key decisions across business and personal finances from all the different areas."

Having an overall plan is a key component of success, he argues. "You should get better decision-making, better allocations of resources and there should be a time- and cost- savings."

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