Secure The Future of Your Business
“It takes as much energy to wish as it does to plan.” – Eleanor Roosevelt
Creating a business plan is one of the most important decisions you can make to ensure your company’s future success. Proper planning may help you achieve steady growth, retain top talent, and secure a comfortable retirement. Without a plan, your business may suffer losses, lose employees, and jeopardize both your income and your retirement.
- Businesses with written business plans grow 30% faster than those that don’t plan.1
- 72% of family businesses want to ensure the business stays in the family, but only 34% have a robust and documented succession plan.2
- About 30% of family-owned businesses survive into the second generation, 12% into the third generation, and only about 3% into the fourth generation and beyond.3
This month is National Write a Business Plan Month (yes, really). Celebrate it by taking the following key actions to recognize and address risks, and secure your company’s future.
Strategies to Help Protect You and Your Business
Strengthen Key Employee Protection
Plan proactively for the sudden loss or temporary absence of essential team members. Put key person insurance or retention strategies in place for key personnel to help protect cash flow, stabilize operations, and give your business time to adjust without losing momentum.
Create a Succession Plan
Define how your business will move forward if you’re no longer able to lead. A clear, documented succession plan ensures continuity, sets expectations for stakeholders, and positions the next leader whether a family member, partner, or employee.
Develop an Estate Plan
Treat your business like the major asset it is. Create a well-structured estate plan to help protect its value, outline who will receive ownership, and provide guidance for co-owners or family members. This reduces uncertainty, supports continuity, and preserves what you’ve worked hard to build.
Steps to Get Started
- Discuss your business objectives for the future with both co-owners and family members and be sure to document them.
- Consult with your tax and financial advisors about developing a succession plan that aligns with your estate planning.
- Schedule an appointment with a financial expert to explore how life insurance can strengthen your overall business strategy.
Prepare Today for Peace of Mind in the Future
A written succession plan ensures stability for your family and business if you or another owner faces death, disability, retirement, or another major change. By creating a plan in advance, you can help safeguard your business from these unexpected challenges. Planning can provide peace of mind knowing that you are prepared for whatever the future may hold.
FAQs
Why is planning for your business so important?
For many small business owners, business succession planning is crucial because it safeguards against changes in management or ownership.
What is key person insurance?
Key person insurance is a type of life insurance that a business buys to cover an owner or employee whose work is essential to its ongoing success. The company pays for the policy with after-tax income, owns the policy, and is named as the beneficiary.
What is a succession plan?
Succession planning ensures a smooth transfer from current to future owners and offers a way to convert business interests into cash for retirement, survivor benefits, or estate expenses.
Why is a buy-sell agreement important?
A well-constructed buy-sell agreement effectively aligns business objectives with estate planning strategies by ensuring that ownership interests are transferred to appropriate parties, at the optimal time, and through proper procedures.
How can life insurance help?
Life insurance can fund the replacement of a key person, ease business transitions, offer tax benefits, and provide financial security for you and your business.
David Hayward, CLU, ChFC, FMLI
David has over 30 years experience in the insurance industry and joined the National Life Group in 2008 as an Advanced Sales Specialist with the Advanced Sales Team. He graduated from Drake University with a Bachelor of Science in Business Administration with a major in insurance and an emphasis in mathematics. He earned the Chartered Financial Consultant (ChFC) designation, Chartered Life Underwriter (CLU) designation, and Fellow Life Management Institute (FLMI) designation. He holds FINRA Series 6 registration and is a registered representative of Equity Services, Inc. (Member FINRA/SIPC). David focuses on the small business market specifically with non-qualified employee benefits, business continuation, estate planning and working with large and unique case designs.