Successful business planning balances three needs
Every business owner faces the challenge of deciding how to best use available resources to grow their company. But positioning a business for growth takes more than just producing more of a good or service.
It’s also about finding the right balance when setting up plans to protect your business, to provide for your employees, and to take care of your own needs – because neglecting any one of those areas could jeopardize the ability of your business to succeed.
Protecting your business
Even thriving businesses may face adversity. Without the right safeguards in place, what should be temporary setbacks can quickly become serious threats to the health and sustainability of your business.
One of the most significant risks you can help protect your business against is the impact of losing a key employee due to death or disability. The impact to the business is heightened even more if the loss involves an owner, which is why many successful businesses put buy-sell and business overhead expense policies in place. These help ensure that the business can continue operating when challenges come, helping protect the livelihood of the owners, employees and their families.
Providing employee benefits and rewards
When structured effectively, employee benefits become a powerful and cost-effective way to drive business results. To get started, foundational benefits like a 401(k) plan are critical to attracting and retaining talent, while helping your employees prepare for the future. Offering access to supplemental benefits, like individual-owned disability income (DI) insurance policies enhances your benefits package, and can help your employees ensure financial stability in the event of a serious illness or injury. Targeted benefits for your top talent, like executive bonus plans and split-dollar life insurance, can improve retention and reward them for delivering exceptional business results.
Planning for your own needs
With so much time, energy and passion invested in your business, it can be easy to forget to take the time to plan for your own financial future. And while your business may be the best investment you ever make, it’s also true that not every business succeeds. An over-reliance on your business to provide for you and your family may be putting your future at too much risk. Other factors beyond your control, like an unexpected disability or premature death, can also put your family and business at risk, even if your business is thriving.
Effective personal planning helps balance these risks so that you can focus on making your business successful, while knowing that the needs of you and your family will be taken care of. You can take important steps like having sufficient life insurance, helping protect your income with DI insurance, setting aside resources for your retirement, and planning ahead for the future sale or transfer of your business.
Balancing business and personal planning takes a bit of extra effort, but with a bit of guidance from a financial professional, it can help you maximize the value of your business for you, your family, and your employees.