The path to personal wealth is statistically most often laid by those who put down their paving stones as business owners.

According to The National Association of Women Business Owners, currently 10.6 million women business owners spend $546 billion annually on salaries and benefits. Family-owned business research records that 35% of Fortune 500 corporations are family-controlled; family-owned businesses account for 50% of the gross national product. These are impressive statistics on the success of entrepreneurship in the United States of America. Perhaps only second to the American Dream of home ownership is the concept of personal business ownership. Additionally, tax experts recommend owning a home-based business as a way to manage deductions to the greatest advantage.

It is just here though, that entrepreneurs face a two-edged sword, and need to make decisions that are in their best long-range interest.

The goal of most business owners is to sell what they have built, recovering the highest sale price possible, as reward for years of often difficult work. But if tax deductions are unwisely loaded on to the business during its years of operation, continually reducing the demonstrated income to the business, the end value can be pitifully small to a prospective buyer. This of course, eats a big chunk out of the potential sale price, which the entrepreneur may have been planning upon to fund his/her retirement.

Small business owners, defined here as those generating under 1 million in annual revenue, do need to take full advantage of the savings potential available to them, especially planning for their own retirement. They will be wise to choose among these established options:

Employee 401K Plan (Funded by employee contributions and often by matching contributions from the employer, called a Qualified Plan, is best for companies that can sustain the set-up and administrative costs and want to invest in their employees over the long-term).

Sep IRA (Simplified Employee Pension Individual Retirement Account: allows larger contributions for a smaller number of employees including the owner---this is a low-cost pension plan for small businesses).

Simple IRA (A savings incentive matching plan for employees: easy to administer, low cost of start-up and maintenance).

Solo 401K (Tax deferred program for the single practitioner: high limits on annual contributions---sole proprietors can contribute $40,000 or more depending upon age, compensation and earned income).

According to Bruce Lloyd Bradshaw, a senior investment advisor, “Too many small business owners take all the income out of the business, expense it away, make it look as though they made no money. As a consequence the business does not look like it is viable when they are ready to sell it. They do need to take a reasonable income, but have the business contribute to their savings plan as retained earnings. This creates a much more lucrative proposal in the eyes of the prospective buyer…and it protects the business owner over the long term.”