Taking Care of Your Business

Keep Your Business Alive

One of the first things any business owner needs to consider is how to protect against events that may threaten the future of the business, like the death or disability of a proprietor, partner or key employee. When adversity strikes, a smart business continuation plan can help protect business partners and family members alike.

Protecting Your Business

You might think that when you die, your family could maintain their income by running the business themselves or by hiring someone to handle the day-to-day management. The fact is, your loved ones may not have the skills or desire for the job and your co-owners may not welcome the idea of an unintended partner.

A buy-sell agreement is an agreement between owners to buy out a co-owner’s share of the business in the event of that co-owner’s retirement, disability or death. You can enter into a buy-sell agreement at any time, but it often makes sense to do so when a business is formed or when new owners are brought in.

There is also business overhead insurance, which reimburses a business for overhead expenses if a business owner becomes disabled. This typically pays benefits for one to two years and helps cover expenses like salaries, taxes, employee benefits, rent, mortgage, utilities, and equipment.

Transferring Your Business

Someday you may decide you’d like to retire, work fewer hours or sell the business. The trouble is many business owners don’t have a plan in place for exiting the business.

Do you have a definite plan? Do you know when you would like to exit your business? Will you sell the business to a third party or a co-owner, or will you pass it to your children or another relative? Do you know how much income you will need after you leave the business and can you sell the business for enough to earn that income?

What happens to your business when you die?

Protecting and Retaining Key Employees

You depend on your key employees. Chances are they contributed to the success of your business. Special compensation arrangements, such as an executive bonus plan or deferred compensation plans can help your business retain its key employees by providing additional benefits above your business’ standard package.

Additionally, coverage is available to help protect your business from the unexpected death of a key employee. Life insurance owned by your business can help cover the cost of finding and training a replacement.

If you have questions and would like to schedule an appointment, call toll free (800) 606-4371 or Contact Us
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