Are you an entrepreneur providing financial support for your parents?
Launching a business is no easy task, especially if you lack working capital to do so. In fact, 82% of small businesses fail due to cash flow issues.
If you are also trying to assist aging parents as a business owner, you may be facing quite a challenge.
Luckily, it is possible to realize an entrepreneurial vision while supporting elderly parents. In this post, we discuss how to help aging parents while financing a business.
Read on for insight!
1. Understand Your Parents' Financial Needs
You cannot assist your aging parents successfully without awareness of their financial needs.
Some adults have at least a general idea of their parents' financial health. Yet most may not know the precise details. This is especially the case if your parents like to keep their monetary dealings private.
Start a conversation with your parents now to get further insight into their financial needs. Be as frank as possible in this conversation. Express your dedication to their financial well-being and your willingness to help.
Productive discussions should create a solid picture of their monthly income. Make sure you include Social Security, retirement savings, and investment income. It should also approximate costs (credit card bills, insurance premiums, etc.).
If your parents aren't able to handle their own finances or unaware of their financial situation, step in yourself. Review bank statements and consult with relevant financial advisors.
Once you have an idea of your parents' financial needs, you'll be able to decide how best to help them. They may only need help with financial management. Others may need additional cash flow, depending on their needs and physical health.
2. Designate Management Solutions
If your aging parents are struggling to stay on top of their finances, help them come up with management solutions. This may mean granting you access to their online accounts.
It could mean getting power of attorney. This will enable you to make financial decisions and access other accounts on their behalf.
Learn more about obtaining power of attorney here.
If you don't have the time to step in in this way, consider hiring a personal accountant for your parents. This, of course, will depend on their resources (and yours).
However, handing the money management reins to someone else can be vital if you are struggling to manage your own business on your own schedule!
If you go this route, be sure to get a quote on accounting services before hiring.
3. Explore Assisted Living Opportunities
If your parents need hands-on care, it may be time to explore assisted living opportunities.
If you're wary of doing this given your business's financial demands, keep in mind that assisted living costs may be tax deductible! This means that if you are paying for long-term care services for your parents, you could get a tax credit.
A tax credit is not the same as funding. However, it can give you a valuable return on a long-term investment.
Your parents' health insurance plans could also cover assisted living expenses. A long-term care insurance policy is likely to front most if not all these costs.
Review your parents' insurance coverage to see if this is part of their policy. Otherwise, consider seeking a new plan that could assist with senior living and care.
4. Know Your Business's Financial Needs & Seek Financing
As you seek solutions for your parents' long-term and financial care, take the time to assess your business's financial needs.
You may have already done this when crafting your business plan. Comprehensive business plans include a financial timeline of anticipated expenses and revenue. They should also include any existing assets or plans for funding.
Based on this assessment of financial need, explore financing options. If you're fronting part of the bill for assisted living costs, financing may be your only option right now.
Don't let this dissuade you. Plenty of entrepreneurs take out small business loans. What's more, it is possible to take out a loan with manageable repayment terms.
Research lenders before requesting a loan. If you have time, consider improving your credit score to boost your eligibility for approval. Most lenders will assess entrepreneurs' personal credit histories when reviewing applications.
Loans aren't the only financial solution. You can apply for a variety of small business grants, for example, or crowd-fund your business via a platform like Kickstarter. An investor may even be willing to help you out.
5. Tap Into Your Network
As a business owner, you likely already have an established network of professionals and entrepreneurs. Such networks are invaluable when it comes to industry advice and business financing.
Don't be afraid to tap into your network as you navigate managing your business's and parents' finances. Chances are, someone else within your sphere has gone through a similar journey--if they aren't also on that journey at this exact moment.
Networks can also connect you with prospective investors and business partners. You may even be able to get a co-signer on a business loan by exploring your connections.
Lastly, your network may be your family itself. Consult siblings (if applicable) and other relatives to see who can provide assistance as you support your aging parents.
6. Consult a Financial Advisor
Professional advice can be invaluable in this situation, especially if you worry about being able to help your parents while managing a business.
Consult a financial advisor for advice. In fact, you may even be able to find a financial advisor who specializes in assisting entrepreneurs.
Advisors can also help you navigate taxes.
Final Thoughts: How to Help Aging Parents
If you're wondering how to help aging parents as an entrepreneur, stay calm. It is possible to care for your parents and finance a business at the same time.
Begin by assessing your parents' financial needs and explore management solutions if applicable.
Assisted living may be necessary, but the costs for such care are likely tax deductible and/or covered by insurance.
Explore small business financing options and consider applying for a grant for extra financial assistance.
At Ad Exchanger, we devote ourselves to building the network you need to succeed, no matter your financial path. Check out our further resources here!