Ep 266: Paying Homage to Small Business owners during National Small Business Week

For more than 60 years, the U.S. small Business Administration has celebrated National Small Business Week, which acknowledges the critical contributions of America's entrepreneurs and small business owners.

So on this week's episode, we're going to talk about why the small business owners of the world are heroes, talk about some of their struggles, and talk about some of the things that they need to be thinking about as they're running their businesses.

So I hope that you enjoy this episode.

Welcome to the weekly wealth podcast.

I am certified financial planner David Chudick.

This podcast and my wealth management practice are both designed to help the mass affluent to live better lives by how they handle their money.

We talk about financial strategies, prosperous mindsets, and simply how to build true wealth.

So come on and let's enjoy this journey together.

I want to do something a little bit different today.

I want to start this episode by just saying thank you.

This is Small Business Week, and I know what that usually looks like.

It's press releases, some ribbon cuttings.

There's going to be some LinkedIn posts about hustle and grit, and that's fine.

But I want to do something more than that.

I want to actually stop and say what I think doesn't get said nearly enough.

If you own a small business, if you've built something, if you're running something, if you're fighting every single day to keep something alive, I see you.

I hear you.

I am one of you, and I want you to hear this.

What you do is hard.

Really hard.

Not, quote, long hours hard.

Not, quote, stressful week hard.

I mean, the kind of hard that most people will never understand because they've never done it.

You're the CEO.

You're the janitor.

You're the visionary.

You're the person who answers the phone when the Vendor calls at 7am you carry the payroll, the insurance, the taxes, the customers, the employees, the equipment.

All of it in your head every single day.

You don't clock out.

You don't get to leave the office.

It comes home with you.

It wakes you at 3am it's the last thing you think about before you fall asleep.

And here's what the numbers say about people brave enough like you, brave enough like me to try this.

There are 34 million small businesses in the United States right now.

34 Million.

That's 99.9% of every business in this country.

And Those businesses employ 61 million Americans, nearly half of the entire private workforce.

Over the last 25 years, small businesses have created more than 12 million net new jobs in this country.

Not the Fortune 500.

Not Wall street, just people like you deciding to build something and bring others along with them.

But here's the thing about those 34 million businesses.

About one in five won't make it past their first year, half won't see year five, and nearly two thirds will be gone by year ten.

Those aren't just statistics.

Every one of those is a person who bet on themselves, who gave everything they had, and who, for one reason or another, couldn't make it work.

It's not failure, it's courage.

Most people never even try try.

What about the ones who do make it?

Let's talk about what it actually pays.

Because a lot of people think, hey, if your name is on your sign or if your name is on the door, you are bringing home a lot of money.

Well, the median small business owner in 2025 took home about $57,600 in that year.

That's the midpoint.

Half of all small business owners made less, half of all made more.

But the bottom 10%.

Yeah.

$36,000 A year for someone who's the owner, the operator, the decision maker, the risk taker.

$36,000.

And that's with a lot of risk, too.

And it gets more real than that.

In the last year alone, nearly one in three small business owners cut their own salary, not their employees salaries, not their own, to keep the business running.

They made payroll, they kept the lights on, they paid everybody else first.

And they quietly took less for themselves or nothing at all because that's what it took to keep the doors open.

That's not a business decision.

That's a sacrifice.

That's someone who loves what they built so much and cares so much about the people around them that they'll personally absorb the hit before they let anyone else feel it.

I think that is genuinely heroic, and I don't use that word lightly.

And here's one more thing I want to say before we get into the episode.

Today, a lot of small business owners struggle financially.

Not because they're bad at their craft, they're usually exceptional at their craft, but because nobody ever taught them the money side.

How to price their work, how to manage cash flow, how to think about building personal wealth alongside the business, how to plan for the day they eventually want to walk away.

That's not a character flaw, that's a gap.

And exactly the gap I spend my career trying to close.

So this episode is for you, the business owner.

I'm one of you.

I love you.

The business owner who's been heads down building Something real this week is for you.

You.

You have earned it.

Okay, so let's get into the meat of the episode, but before we do, make sure you're doing all the things.

Check out our YouTube page, check out our Facebook page, and also check out our Instagram content.

We're doing the best that we can to provide value to the world.

And like I always say, I believe that how we handle our money should positively impact our lives and the lives of those around us.

And I hope that this podcast and our social media content can be a little piece of that puzzle in your life.

And don't forget, what I provide is the intersection of wealth management, the intersection of business strategy, and the intersection of risk management.

So these are three areas that all of the business owners of the world need to be looking at.

And we talk about a lot of those things on the weekly wealth podcast.

So let's talk about a few things that a lot of the business owners and a lot of the entrepreneurs of the world are not talking about or nobody's talking to them about.

And that's because they're busy.

It's because they're dealing with staffing issues, dealing with all of the problems that business ownership brings.

So the first one is that your CPA typically is looking in the rearview mirror.

And if you remember episode 264, just a few weeks ago, we talked about this.

So I won't get into it in too much depth, but your cpa, your tax preparer, is a historian.

They're typically exceptionally good at recording what happened.

They file your return, they keep you compliant, and they make sure the IRS isn't knocking at your door.

So God bless them for that.

Right, because none of us need the IRS knocking at our door.

But proactive tax planning, that's a different conversation.

And for most business owners, nobody's having it.

So how much are you actually paying in taxes?

Add up your federal, state, self employment, a lot of business owners have 30, 40, and maybe 50 cents on every doll.

And the scary part is sometimes it doesn't need to be that high.

So between the right entity structure, qualified retirement plans, depreciation strategies, if you've got kids, sometimes you can pay them legally and tax efficiently.

So lots of different tax strategies out there.

Tax planning isn't about cheating the system, but it's also about not donating more than you have to.

And one of the principles of tax planning is making sure that we're paying taxes when they will be at the lowest possible rate.

So sometimes paying taxes now and having a tax Free account later on makes a lot of sense.

Sometimes getting the tax break now and paying taxes on the money, on the distribution makes a lot of sense.

And this is where the tax planning piece of the puzzle comes into play.

Now, another thing that a lot of our business owners are not talking about and are not doing properly, and that's like they have their business and personal finances in one big knot.

So show of hands here, raise your hand.

Well, maybe not if you're driving, but how many business owners are running personal expenses through the business?

How many are paying themselves inconsistently?

Or how many are just not sure what you're actually making in a given year?

So this is way more common than anyone wants to admit, and it creates a cascade of problems.

You can't accurately read your business's profitability.

Your personal financial plan is based on shaky numbers.

If you ever want to sell or bring in a partner, the buyer's due diligence is going to make this very uncomfortable very quickly.

The fix is not complicated, but it requires discipline, Separate accounts, a consistent owner's salary, or draw a clean record of what the business produces versus what you personally spend.

When your personal and business finances are intertwined, you don't really know your number.

And if you don't know your number, you can't plan.

So I talk to businesses all the time, small businesses, bigger businesses, and they'll say something like, I made $10,000 last week or I made $500 on that sale.

And the real way that you should frame that is not that I made.

It should be that the business brought in X amount of revenue.

And then of course, from that revenue, you have expenses and a small portion of it hope, hopefully will flow through to the business owner in the form of profit.

Make sure that you're not confusing business revenue with profit, because they're not the same thing.

Revenue minus expenses is profit.

Revenue in itself is just a number.

And in theory, you can have a whole lot of revenue and still not have profit.

Now, here's another mistake, and here's another thing that a lot of people are not talking about who are business owners, and that is that your business is your retirement plan.

And this is a big one.

And I talk to business owners all the time who have most of their net worth tied up in their business.

And when I ask what their retirement plan is, they say some version of, I'll sell the business.

Okay, but have you thought about what it would actually sell for?

Have you had it valued?

Do you know what drives the value?

And whether you're actively building those things.

Because here's the uncomfortable truth.

Most businesses don't sell for what the owner thinks they're worth.

Some don't sell at all.

And businesses that are entirely dependent on the owner's relationships, skills and presence, those are the hardest to sell because buyers know the value walks out the door with you.

This is exactly why I use something called the Sellability Score with business owner clients I work with.

It's a free assessment that scores your business across eight drivers that actually move the needle on what a buyer would pay.

Concentration, risk, recurring revenue systems that runs without you.

I'll put the link in the show notes and if you haven't done this, it should be your homework this week.

So go to www.weeklywealthpodcast.com sellabilityscore.

It's free, it's 15 minutes and it's eye opening.

Your business is an asset, but it's a single illiquid asset.

That's a risk that needs to be managed, not hoped away.

Now another mistake or another topic that a lot of people are not talking about is risk management and underinsurance.

Remember, I wear two hats.

I'm a certified financial planner.

I run a wealth management practice.

But I also own a proper casualty insurance agency.

And I can tell you one thing.

Business owners are chronically and often dangerously underinsured.

And it's not always the obvious stuff.

Most people have general liability, but they have property coverage and maybe there are gaps in less visible places.

So maybe do you have disability coverage?

Not on your employee group Plan your coverage as the owner because if you get hurt and can't work for six months, who runs the business?

Who pays the bills?

And your health insurance pays the hospital bills.

This does not pay your mortgage.

Do you have key person life insurance?

If you have a business partner, do you have a buy sell agreement funded by life insurance?

Because without it, if your partner dies tomorrow, you might be in business with their spouse who knows nothing about the business and who has opinions that you may not agree with.

Business insurance is not a set it and forget it thing.

Your business changes.

Your risk changes.

If you haven't had a real review of your coverage in the last two or three years, it's worth a conversation.

So here's something that a lot of business owners may not think about.

Let's say you send one of your team members to the bank.

They're driving their own car.

They're on company time.

They go to the bank to make the daily deposit, right?

So while they're doing this, maybe they Run a stop sign and they cause somebody else to have a grave injury.

They cause major property damage.

Major bodily injury damage.

Well, typically, and it may vary in some states, but typically the employees are.

Car insurance would be primary, which means that it's going to pay for damages first.

Now, if the damages exceed the amount of insurance that the employee is carrying, well then the person that got hurt is going to sue the business.

And the business owner is really going to hope that they have non owned auto coverage somewhere on one of their business policies.

And the reason that they would want non owned auto coverage is because somebody who is driving a vehicle that was not owned by the business caused a loss.

So I bet you may not have ever thought about that possibility.

And I have a lot of other scenarios that can potentially be crippling to the business owners.

So we can't talk about all of the ways that business owners might be underinsured or under protected, but I want you to work with a great local independent insurance agent and ask them, what are my exposures?

And tell me how to transfer the exposures.

And sometimes it makes sense to not transfer the exposures and just retain the risk yourself.

But you need to do all these things purposefully and just not by default.

Here is the last thing that I want you, the entrepreneur, I want you, the business owner, to be thinking about.

And actually how about talk about this with your other business owner friends.

And that is your organizational culture.

So do you have a culture of excellence?

Do you have a culture that says we are going to find a way?

And quite frankly, it is your job as the business owner, as the entrepreneur, to set the culture and make sure that everybody within your organization fits into that culture.

So maintaining culture is one of the most important jobs of the business owner.

It's one of the most important jobs of the entrepreneur.

But nobody really teaches you how to do it.

So it's really leadership, right?

It's how do you lead your people, how do you set expectations?

And what are the behaviors that are acceptable within your organization?

And what are the behaviors that are not acceptable within your organization?

What are the attitudes, what are the thought processes?

What are all of those things that help your business to be what it is?

So make sure that you're defining your culture, make sure that you're protecting your culture and make sure that anybody who is attempting to change the culture or having a negative effect on the culture, make sure that it's being dealt with.

Now it doesn't mean you have to fire somebody right away, but yes, there will be people that just don't fit into your business culture and ultimately that, that's something that needs to be dealt with.

And there may be times where you go through different seasons where you may have had some team members that aligned with your culture and for whatever reason, maybe at another point they no longer align.

So doesn't mean you're a bad person if you don't fit within the culture anymore.

But protecting the culture of a business is one of the most important jobs of the business owner.

And I want to finish up talking a little bit about comparison.

And as a business owner, as an entrepreneur, it can be lonely and oftentimes it can feel like everybody else is succeeding except for you.

So I was recently at a conference and met a business coach, this was an exit planning conference and had dinner with, with, with a guy, I'll never see him again, but he was a good dude.

And, and we were talking about business ownership and leadership and all of these things because I geek out on these things.

And I told him that, you know, I, I need to improve my business ownership skills and my leadership skills and, and I said, you know, I think I've always been really good at my trade, but maybe I've not been the greatest business owner.

And he said something and it was, it was almost loving and caring.

He said, yeah, but compared to what?

Right?

He said, can you put your head on your pillow at night and sleep and know that you treated people honestly?

Well, yes, maybe to a fault.

It's like, how long have you been in business?

21 Years.

Well, he's like, you survived way longer.

And what he said was, don't compare yourself to others.

Don't compare yourself to what you think is the truth.

Now, as a financial advisor, I work with business owners and I know that very many other business owners, they may look like they have a lot of money, they may look like they're doing more sales than we are, but oftentimes it isn't the case.

There are times also where maybe the business owner, they are successful based on revenue and profit numbers, but maybe also they paid too big of a price as far as spending too much time away from their family and maybe not being a good dad.

So here's what I'm asking you.

Build a community of like minded business owners.

I'm in a mastermind group of Christian businessmen and we get together once a month and we just talk about issues and problems and challenges and goals and, and how to build the kingdom with our businesses.

But get together with business owners and talk about the things that are important, but don't compare yourself, all right?

You never know.

A lot of times what you see in others is their highlight reel, and you're always comparing your slumps to their highlight reel.

Trust me when I tell you that every business, every business goes through slumps.

Every business has vulnerable periods.

Every business has times where maybe their staff is not what it should be.

Every business has time where revenue is tight.

So if you're going through one of those times, and if you even just want to Talk, email me davidarallelfinancial.com let's just talk about business a little bit and if I can ever offer you some encouragement, I would love to do so.

Because trust me, I've been there, it's happened.

So that'll do it.

If you've ever wondered what it might be like to work with me personally as your financial advisor, let's have a Talk.

Go to www.weeklywealthpodcast.com Vision Schedule your 10 minute vision call.

Let's talk about one or two of the financial issues that are keeping you up at night.

I'll do my best to point you in the right direction.

If there are any next steps, we can talk about those and if not, we can say that we can tried and we gave you some direction.

So until next episode, I wish everybody a blessed week and take care of your people and do what you can for the world.

The information presented on this podcast is for general educational purposes only and does not constitute financial investment, legal or tax advice.

Parallel Financial is registered with the U.S. securities and Exchange Commission SEC as a registered investment advisor.

Registration does not imply a certain level of skill or training, nor does it constitute an endorsement by the sec.

All investing involves risk, including the potential loss of principal.

Please consult a qualified financial professional before making any financial decisions.

And here is this week's bonus content.

And I want to reiterate.

Remember, you're not alone.

Business ownership is hard.

Entrepreneurship is hard.

So align yourself with a great a great support group and don't compare yourself with others.

You don't want to compare your slumps with anybody else's highlight reels.

And remember, everybody goes through challenging periods.

All right everybody, until everybody until next episode.

I wish everybody a blessed week.

Thanks.