If you are like most entrepreneurs, the vast majority of your assets are in one industry, in one geographic location, in one company – your own.

After discussing your goals, what is the first thing any financial advisor will mention to you? Asset allocation and diversification. Generally, they will use all types of software modeling to plug in your available cash along with your age and risk appetite to determine how to allocate your assets. Then, they will focus on the need to diversify among the types of assets (i.e. bonds, stocks, etc.) and different investments, either in various industries, geographic locations or company size.

Now, if you are an entrepreneur and company owner, your picture needs to be looked at more broadly. Where is your wealth? If you are like most entrepreneurs, the vast majority of your assets are in one industry, in one geographic location, in one company – your own. If one of the key paths to long-term wealth management is diversification, then how are you doing?

We have all read about the wild success stories of entrepreneurs who have hit homeruns in their respective businesses. There are no better American success stories than those of Bill Gates of Microsoft, Larry Page and Sergey Brin of Google, Steve Jobs of Apple, Sam Walton of Wal-Mart, Ray Kroc of McDonald’s, or Ross Perot of Electronic Data Systems. They are icons in their own right and have legendary stories about putting it all on the line to turn their companies into giants. They make great and interesting stories because they are few and far between. A small minority of companies even make it to the benchmark point of having an IPO.

Yes, it is true that these select entrepreneurs probably did not have a diversified asset base. However, we don’t often hear about the many tremendous companies that have a great run only to falter or stagnate at some point. It doesn’t make for an inspiring and interesting story to read or talk about. The majority of entrepreneurs often aren’t realizing the homeruns of their investments in their companies, and if they wait too long they may not even get a single or double out of it. Very simply, things change. Often factors are beyond their control.

Start asking yourself about your personal financial goals. When do I want to retire? How much money will that take? What other needs and wants do I have financially? Second home? College tuition? Or just financial independence and security?

And ask…what if? What if our economy changes? What if there is a transformation in my industry? What if we lose our biggest clients? What if something happens to me? or my family?

Is it time to diversify your wealth to better secure your financial future? Perhaps it is time to investigate a true exit from the business. However, there are other options for successful companies to pursue a corporate recapitalization, allowing the owner of the company to bring in a new equity partner while still remaining at the helm of his or her company. Let S&P Capital discuss some of these options with you. The goal is to determine what your personal and professional goals are and develop an exit strategy that is complementary. Let’s take a broader look at your wealth management and determine how you can better diversify your wealth for long-term growth.