These days, mall business clients are suffering in two ways. After pouring blood, sweat and tears into their enterprises for decades, they're worrying about shrinking revenues and finding enough operating capital to survive this tough economic climate.

At the same time, business owners feel the pain in their personal retirement accounts. Should they take what money is left to pay business bills? As a financial advisor, you can offer strategies to help business owners cope.

Reach Out

Often, financial advisors become "phone-reluctant" when there is no good news to share. Experts warn planners against developing this negative tendency. A slow economy is a perfect time to cement relationships or even to pick up new business.

"In markets like this, a lot of advisors find the phone too heavy to pick up. But I pick up more clients in this environment than any other," says Jon L. Ten Haagen, founder and principal of Ten Haagen Financial Group in Huntington, N.Y.

Small business clients often need an objective voice to help take the emotion out of financial decisions. "Even the good managers get mired in minutiae and freeze up-even panic," says Andy J. Matysik, managing partner at L.M. Punch & Associates in Minneapolis.

"As objective advisors, we have the luxury of stepping back and guiding them to things they might well have arrived at on their own, but due to the level of emotion involved, they are not likely to get there without help," Matysik says.

Financial advisors should guide business owners to review employee retirement plans with an eye toward cutting administrative costs and possibly reducing or temporarily eliminating contributions for employees. A small firm with a 401(k) plan that costs $2,000 a year to administer may be better off switching to Simple IRAs with no administrative costs, especially when the company is no longer able to contribute matching funds. Financial advisors can support clients through these often painful decisions.

In one case, the owner of a lucrative 11-person firm in New York City found himself no longer able to afford to match employee 401(k) contributions, as he had done for years, because the company's sales were down. "He felt horrible," says Richard Colarossi, CFP and partner at Colarossi & Williams in Islandia, N.Y. "I went to his office and told him, 'You have no reason to feel horrible, you've been very generous for 10 years.'"

Looking at the numbers, Colarossi persuaded his client to reduce the amount of the match instead of eliminating it outright, which would have upset the staff. "At my recommendation, they reduced their contribution from a 100% match to 4% of compensation, which was still enough to meet their plan's safe harbor requirement but saved them $37,000 a year," Colarossi says. In addition, Colarossi met with employees and explained why cuts were necessary, reminding them that they were lucky to have such a generous employer—a bit of additional service that earned his client's deep gratitude.

Many experts expect tax rates to go up with the next presidential administration. If a business owner's income is less than $100,000 this year, planners might want to bring up the idea of converting retirement assets to a Roth, so that he or she can pay taxes on those assets while in a lower tax bracket. "The business owner can amend the retirement plan to allow in-service, non-hardship withdrawals, then roll it into a Roth," says Pam Dumonceau, president of Consistent Values, a planning firm in Aurora, Colo.

Cut Costs

When sales are down, escalating healthcare costs become even more painful for small businesses to bear. Many business owners are unaware that changing employee health insurance plans to a high-deductible health plan that is compatible with health savings accounts (HSAs) could reduce their premium expenses by 30% to 50%.

"There are not a lot of ways to cut health insurance costs, but if you've got a small employer who is pretty well out of options and has to cut expenses to get over the hump, he or she should look into these high-deductible health plans," says Leon Rousso of Leon Russo CFP & Associates in Ventura, Calif. "For a 15-person group, the savings could be $30,000 or $40,000 a year—which might mean saving one employee."

Ordinarily, Rousso says, he would advise that half of the cost savings be shared with employees in the form of contributions to their health savings accounts—accounts that allow individuals to put aside money for qualified healthcare expenses on a tax-free basis. It's a move that's good for morale. However, if a business is struggling to stay afloat, all of the money saved can be used to pay the bills.

Rousso points out that helping small business clients save money on health insurance benefits is a great way to gain trust and build relationships. "You can really prove your mettle by doing something radical for them with health insurance benefits, then pick up the retirement business later," he says.

Rethink Expenses

Advisors should also encourage business owners to take some extra time in a slower business environment to take a hard look at their expenses, experts say. "look and see, do I really need all the people I have, all the software I'm paying for, all the space I'm leasing?" says Michael Nathanson, president and chief executive officer of the Colony Group in Boston.

"Use this time to look inward, while you have the motivation, and frankly have an excuse to make cuts."

Vincent Schiavi, president of Schiavi and Dattani in Wilmington, Del., believes that "small business owners need to get their accountants involved and really look at budgeting." An accountant in the industry can tell you if your ratios—like days in accounts receivable, revenue per employee, gross profit margin—are in line. This information can help business owners make decisions such as whether or not to discontinue a product line.