Business Strategies
Business Planning for Success
Business strategies to help your business succeed. Most small businesses fail to plan for business continuation in case of an owner’s disability, retirement or death.
You can Improve your company’s strategic planning and execution when you formulate intelligent business strategies and communicate these plans throughout the organization.
Business planning requires careful thought and analysis. Implementing proper business strategies will help your company reach its desired objectives. Risks can be reduced and profits increased through proper planning.
Types of Business Strategies
Most small businesses fail to survive beyond the first generation.
One reason is the failure to plan for the disposition of the business at an owner’s death, disability, retirement or withdrawal.
- Would Your Business Survive Without You?
- Will your business continue to thrive in your absence?
- Are there family members, other owners or key employees who could continue to successfully run the business without your guidance?
- Will your family be taken care of financially without your business continuing?
Where the appropriate plan of action would be to sell the business interest, establishing a formal plan for the sale of your business may be one of the most important actions you ever take with respect to your business.
Buy-Sell Agreement
If you own all or part of a business, you should know about buy-sell agreements.
A buy-sell agreement could help protect the value of your business, and reassure your business creditors, customers and employees.
A buy-sell agreement is one way to help ensure the continuation of your business, guarantee a buyer and help make sure your family is taken care of financially.
A buy-sell agreement is a legally binding agreement that requires one party to sell, and another party to buy a particular ownership interest in a business. A buy-sell agreement can be designed to protect the business from certain triggering events, the most common of which are often referred to as the five D’s — death, disability, divorce, departure (either voluntary or involuntary) and disqualification (pertains to malfeasance that would require an individual to be removed from an ownership position).
Learn more, watch a short video on how to protect your business with a Buy-Sell Agreement.
What is a Key Person Plan?
One of the integral factors to the success of any business is its key employee(s). Often, particularly in a small business, this key contributor wears many hats.
This Key Person may be the small business owner, a sales manager or other key positions. What happens to the business in the future if one of these key contributors becomes disabled or dies suddenly? A loss to any business can be devastating, particularly in a small business.
Learn more, watch a short video on key person insurance.
Executive Bonus
An executive bonus arrangement (also referred to as an IRC Section 162 plan) using life insurance allows a business to reward key executives, generally on a tax-deductible basis.
The installation of an executive bonus program within a business offers:
- Retention of key employees
- Creation of supplemental retirement income
- Provides valuable death benefit for the after tax cost of the premium
- May eliminate employee tax cost with a double bonus
- Generates a tax deduction for the employer
Under an executive bonus plan, the executive owns the life insurance policy and has the right to the policy cash value. The employer sometimes sees this as a problem and can use a policy endorsement restricting the executive’s ability to use the cash-value. Learn more about executive bonus.
Business Planning Strategies
To learn more about business strategies and how they can help your business succeed, contact us for a complimentary consultation.