Ways To Ensure Your Business Is A Success With or Without You
When you build a business it takes a lot of your time, your money and basically your life. What happens if something happens to you? This is a very important concept to contemplate if you are a small business owner.
“Like all of us, business owners don’t know what they don’t know. Most successful entrepreneurs started out with a great business plan, but they may not have revisited it over time as the business has grown,” point out a rep from First Horizon Advisors.
Hence a succession plan, which according to Securian Financial Group, 72% of business owners have not created one. Even if a business owner has created one, it needs to be revamped as the business grows and changes.
You want to make sure that your business could operate without you. “We’ve seen companies go out of business when an owner passes away or becomes disabled without a good succession plan in place,” comments Jennifer Schuchart, President of First Horizon Bank Market. You do this by seeing who would make a great successor and let them shadow you. You want to build your successors skills and knowledge.
If you have parents in a business, you need to think about what would happen if you or your partner had to leave the business. This can be due to sudden death, a divorce, or tons of other circumstances. A good way to help alleviate this problem before it occurs is to come up with a buy/sell agreement.
“Plan for an unexpected buyout using life insurance. To fund a buy/sell agreement, the company can hold life insurance on all partners, ensuring that if one passes away, the company itself can purchase their stake,” says Paul Lankau of First Horizon Advisors,Inc.
Retirement can look different to someone who is in business for themselves. A lot of business owners count on their business to help fund their retirement. “They may know where they are now in their business, and where they want to be when they transition out, but have zero idea of how to get from here to there,” Schuchart says.
If you are a business owner and do not have a succession plan, talk to a financial advisor. A good start would be with First Horizon Bank who will put you with a team who can help you with a succession plan.