Courtney Williams never expected to tell anyone to sell the family farm. But when one of her private wealth clients did so, it was with her blessing.

The client, who had closed down his distribution business after getting an offer to rent the building, hit a rough patch when the tenant broke the lease. Without the rental income to supplement his retirement, he'd been siphoning income from a line of credit that was now in need of being shored up.

A decision was made: a portion of the family's farm land, which was owned free and clear, would be liquidated.

As the advisor for her client's business interests as well as his personal holdings, Williams, vice president of private client services at Avenue Bank in Nashville, Tenn., had enough information to know that selling the farm land was the right choice.

"That's all in the relationship of having both the consumer and the commercial side of their business," Williams says.

More wealth managers are looking to develop this kind of breadth. While some advisers partner with outside professionals to provide expertise for small-business owners, others are instead asking their own firms for more training, so that they might learn the basics of an S corporation, for example, or delve into the nuances of tax implications specific to businesses. Sophie Schmitt, senior analyst with the wealth management division of Aite Group in Boston, says there "aren't enough advisers who understand the challenges of the small business side and who are really able to help." But those who are can offer a unique perspective—be it on refinancing a troubled loan or drawing up a divestiture plan for a family business.

Williams has no cut-and-dried methods, and no edicts, for balancing the personal with the commercial. Her approach is more open-ended. "I don't tell them what to do," she says. Instead, she asks pointed questions framed around scenarios in which there are never enough resources. "I turn it into, 'What are you guys willing to give up on the personal side to increase the cash flow and have cash reserves for the business?'"

Handling small-business owners' affairs requires special dexterity. Their financial set-up is unique, sometimes because their business interests involve family, and almost always because their companies have been nurtured directly by a single investor: themselves.

Jeffrey Getty, a Pittsburgh-based senior wealth specialist in business advisory services for KeyBank, often works with business owners as they consider an exit plan. For the client, sometimes it means finding an outside buyer and retiring. Other times, it means structuring a solution that allows family members to inherit and run the business.

The choice may ultimately be a business decision, but, says Getty, a personal element is always involved. "I don't ever tend to split the personal and business financial worlds because they're so intertwined for small businesses," he says. "We often use the phrase 'family financial enterprise' when talking with clients because it's almost impossible to separate the two. And when I meet with a new client I try to get them on board with that psychological view."

Initial meetings with new clients frequently focus on cash flow, with Getty aiming to ascertain how much money a client would be comfortable taking out of the business (in order to build the personal wealth side of the ledger and have more assets that can be protected for the future). Usually there's also an open dialogue about family concerns. When a husband runs a business, Getty brings the wife in early to these conversations, along with children or grandchildren when appropriate.

With some clients, the personal and the professional can make for a volatile mix. Getty recalls being introduced at a family meeting called by a client who, without filling Getty in first, had just informed his children that his sons could take part in the family business, but his daughters could not. The father had Getty field questions from the bewildered family.

"I learned that even in a disaster meeting where people are shocked like that, we can start working and have a dialogue that doesn't end in screaming," Getty says.

"If that decision was made, it's made. But I also knew the father, and could explain that I knew he wanted an equalization of assets. I knew he would pull assets that wouldn't hurt the operations of the company, but still give significant growth potential to the daughters in the room."

Given the fragile state of the economy, many small business owners are holding onto cash reserves instead of reinvesting in their operations for now. And two-thirds of the entrepreneurs trying to launch new businesses will start with their personal savings, as "banks are not venture capitalists and won't lend money unless you have a track record," says Bill Dunkelberg, a Temple University economics professor who also serves as the chief economist for the National Federation of Independent Business and as the chairman of Liberty Bell Bank in Marlton, N.J.

At Avenue Bank, Williams has a client who works for a large accounting firm. It's been his dream for years to strike out on his own, she says. But with his W-2 income set to vaporize when he starts his business, Williams has been advising him to build a cash reserve by working part-time for his current firm, and part-time in his own endeavor, until he can take the leap.

In some instances, Williams thinks would-be entrepreneurs shouldn't take the leap at all—at least not with the financial resources they have in place. Three months ago, a prospect came into the bank hoping to open a restaurant. She had no related experience, but she had an inheritance and hoped to use it as capital. Williams turned her down for a loan, because she didn't want to see the woman lose the inheritance, which would have been needed for collateral. And Williams told the woman this, to no avail.

"She went to another bank, used the inheritance as the collateral, and the business is already shut down," Williams says.

Roughly three of every 10 firms fold in less than two years. Only a quarter of them are still around 15 years later. The economy these past several years has made particularly tricky work of launching and managing a small business. But that makes the success stories all the more meaningful.

Paul Stetter, an Ephrata, Pa.-based first vice president with Fulton Financial Advisors, part of Fulton Bank, has a pair of clients who considered putting their personal savings at stake in the hopes of expanding their successful restaurant business. The owners, brothers, called Stetter two years ago on Labor Day to discuss their options for raising capital. They had opened a steak house four years earlier and now wanted to convert an old diner into a seafood restaurant.

Stetter looked at how the two could restructure some business loans to finance the new project. He examined their personal investments too, dissecting whether equity could be pulled from their homes and whether they should cash in a life insurance policy or a 529 college-savings plan.

Knowing that one brother had a daughter yet to enter college, Stetter advised against touching the 529 plan. Instead, the restaurateurs opted for a floating-rate loan based on their joint commercial holdings. Today, the loan is at 2 percent below the fixed rate on a standard commercial loan, Stetter proudly notes. "They're making out," he says. "It was a big gamble to start a … restaurant in this economy. And they have done very well."

Rhonda Arnett, a senior financial advisor with Columbia Bank in Tacoma, Wash., has a client in his 50s who would like to wind down, retire and sell his large construction company. His young son and a cousin have expressed an interest in buying the business—but they aren't in a position to do so now. The dilemma is that Arnett's client is having to infuse the company with personal capital to keep it running, and he's likely going to have to continue doing so, given the sluggish economy. "So they're keeping it running for goodwill," says Arnett.

That may not be the wisest move from a strictly business point of view. But that's the thing with small-business owners: they often have other considerations to factor into their financial planning.

"The line between the business and personal gets very blurry with small-business owners," says David Schehr, research director with Gartner Industry Advisory Services in Stamford, Conn. "When they get to the right age, they often start to wonder how [to] monetize their business. Should they sell to an employee or investor? How [should they] structure it? It's not the kind of thing where you can find a software package with all the answers in a neat little box. This requires an art as well as a science. It's a skill set that a typical banker or bank advisor may not have."

Lauren Barack is a freelancer writer. She is based in New York.

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