Business Module - RightCapital Help Center

Overview

The Business module enables deeper analysis of a client's often most crucial financial ventures. Here, you can get further insights into a business's value, revenue, expenses, distributions, and tax liability. You can also propose alternative plans for a client's business to create additional value within their larger financial plan.

This module can be accessed under the More Menu "..." > Business:

Adding a Business

In order to utilize the Business module, the client must have a business asset entered under the Profile > Net Worth page. From here, the asset can be added by selecting Add Account > Business.

Once the Business is added, you can add details such as business value, growth, revenue, cost basis, sale date, etc. Details on this process can be found here.

Assets owned by the business can also be added to the net worth. These business-owned assets and liabilities will also flow into the Business Module. For example, you can add liabilities to the business by selecting Add Account > Loan and then selecting the loan's owner as the business:

Once you have a business asset set up, you can head straight to the Business Module by selecting More Menu (...) > Business.

Summary

In the Summary tab, you can get a quick update on the client's business ventures. This page is separated into the Business value and First-year cash flows:

Business Value: This graph will visualize the overall value of the business on the green bar, while also displaying what amount of that is equity and liabilities on the right-hand blue/red bar.
First-Year Cash Flows: This graph will break out the first simulation year's cash flows into 4 sections. Total revenue, expenses, pre-tax profit, and then distributed earnings.

You can switch between specific businesses by adjusting the dropdown menu here:

Balance Sheet

The balance sheet will list all assets and liabilities related to any businesses within the plan. This will include assets such as investment accounts or properties tied to a business:

Similar to the summary tab, you can select which business to review in the top-right dropdown menu.

Business Tabs

This section will include a tab for each business in the plan. Within these tabs, you can view details about each business and adjust action items to create proposals specific to that asset.

This tab will display various data points for each business and the impact of any proposed action items. By selecting the title of the graph, you can switch between results for:

Business revenue
Business expenses
Business Distributions
Total assets over time
Capital gains at sale of business

In the bottom right corner of the graph, you can also select the gear icon to adjust specific settings, such as today/future dollars, or to display years instead of the client's age on the x-axis.

Action Items

The action items at the bottom of the page allow you to create alternative proposals for the selected business. They are divided into three sections: Sale Strategy, Revenue and Expense Strategy, and Distribution Strategy.

"Core Business"

Changes made to the action items should reflect the Core Business, not the assets controlled by the business.

For example, revenue adjustments should be reflective of the business itself, not a change in revenue for a property owned by the business.

Sale Strategies:

Sale strategies allows you to adjust the year of sale, the sale option (lump sum/installment), and the core business value.

Revenue and Expense Strategies:

This section will allow you to control the approach, revenue, revenue growth, expenses, and expense growth.

Simple growth will increase the revenue and expenses according to the percentages entered. Switching to a Detailed Schedule will allow you to customize the revenue and expense amounts for every year in the plan.

Distribution Strategies:

This final section will allow you to control the distribution approach, type, amount, and growth.

Lastly, by selecting "Edit" at the bottom, you can control which items are shown in the action items and save proposed strategies. These strategies can then be utilized in other pages such as the Retirement > Analysis > Action Items for use within a larger proposed plan.

You can switch between saved strategies in the action items by selecting this option:

Strategies

The strategies tab displays the impact of the business proposals on the overall financial plan. Specifically, it will show the impact on the client's invested assets and taxes. You can switch between graphs by selecting the "scenario analysis" item at the top of the page:

In the action items below, you can switch between proposals on all businesses within the plan:

Details

The Details tab provides a full schedule of the businesses and business-owned assets within the plan, with details on yearly revenue, expenses, value, debt, etc.

This tab has two sections. Profit and Distributions and Business Value Summary. You can switch between the two sections through this dropdown menu:

Profit and Distributions: This option will display revenue, expenses, profit and distributions for the client's businesses. This includes details from business-owned assets such as investment properties revenue.
Business Value Summary: This displays the core business value, investments, and debt.

Advanced Value Accumulation Results

If a business is set to the "Advanced" Value Accumulation, the retained revenue amounts will appear in the details tab under the Profits and Distributions tab.

Applying a Business Strategy to the Retirement Analysis Section

After dialing in a business strategy within the Business module, you can then choose to instantly reflect your strategy within any retirement proposal.

To apply a business proposal, visit the Retirement Analysis module and access the action items at the bottom of the screen. On the right side of the action items, isolate the 'Business Strategies' dropdown, and switch the 'Sell business only' option to 'Use business proposal'.

Once you click Refresh in the lower right, details for that plan in the Business module will flow into the Proposed plan: