Project Description
There are many things to consider when you own your own business or professional practice. You have a vision and have developed a detailed plan; you are focused on profitability and growth; and you want to make a difference. Congratulations!
Along with your planning there needs to be consideration for risk management. As your business represents a source of income for you and your family, the risks associated with not being there for the business to run must be mitigated with some advanced planning. Your business may also be a source of income for retirement as well and you should also consider that as you build your business you need to have structures in place to help meet long term personal and financial goals.
You should take advantage of financial strategies early on to help you meet those goals. Such strategies will provide protection for your business, and will save your tax dollars. These structures ensure business continuity and succession planning and will alleviate unplanned situations with key company individuals or partners. Understanding how your business will continue without you or them is vital. Considering situations such as premature death, critical illness or disability will help develop a plan to make a smooth and financially acceptable outcome for all parties including dependants.
Unfortunately, most business owners have no plans in place for continuity which could have tremendous impact on the surviving spouse and children. Imagine who will be at the new helm and can they do the job? The loss of a partner could also leave unplanned trail of instability. Buy/Sell Agreements and Key Person Insurance are essential parts of business structures. Planned and constant communication between all involved parties and family members is essential – lack of such can be the greatest destructive force of wealth. Even in the event of a sale of the business the purchase price can be driven down substantially when perspective purchasers perceive the lack of planning process. It’s also thought that lawyers and accountants can manage things later…but often it’s too late and your true wishes may never be fulfilled. It may even cause family quarrels in light of reaching a solution.
Get a professional assessment as to your risk management needs and integrate this into your plan. This plan is critical not only for the immediate survival of the business, but to ensure that the business can continue as you would want it to in the future. When you exit the business, whether it’s planned or unexpected – be prepared.
Corporate Wills and Powers of Attorney should be reviewed. Life Insurance is not only protecting your family, but can also be an important tool in your financial strategy to transfer corporate wealth to them. Your personal ability to manage the business to earn an income is fundamental to your future and that risk of loss also needs to be mitigated with Critical Illness Insurance and/or Long Term Disability Insurance.
Obtaining a good Health Insurance plan will insure you are covered. Group Benefits planning may be needed for staff that will help you remain competitive and provide quality coverage for them.
If you have the ability to incorporate, you may also realize great benefits in tax savings and creditor protection. There are proven ways to build wealth in a business structure – an expert evaluation should be conducted.
Contact Us for more information about how this could work for you.
