Every business owner faces risk! Therefore there are several key questions that need to be answered if you own your own business.
Do you have a properly designed Buy-Sell Agreement. In other words have you put in place an agreement if one of the partners or co-owners was to leave due to death,disability or retirement. If you do then how is it being funded at this time? If not it might be wise to visit an attorney to formulate the agreement and then decide how it will be funded. Life insurance can provide a buyout fund when an event takes place.
Are there any business loans and are they personally guarunteed?
Most business loans require a personal guaruntee.These loans should also be backed with a life insurance policy and or a disability to cover the outstanding debt to have the peace of mind that the loan will be paid in the event of an event of death or disability.
Do you have enough funds set aside for the business to pay you a salary if you are beset by a prolonged illness and what will your absence mean to the business. Are you the key employee? Can you afford to find a replacement?
Who are the employees that you rely on or are the most valuable to your business? Can your business continue to maintain its current level of production or would it suffer without these employees?
Have you considered being what those employees mean to your business and considered additional incentives to retain their services? They may be the key the the business succeeding if you are unable to work or in the event of death allowing your family to continue managing the business because of your advanced planning.
If you have not prepared for any of these situations you may want to think about what it means to you and your family if your not prepared. You can continue your business and provide you and your family the ability to maintain your current lifestyle and independence.
Talk to your independent agent to set up your business succession plan today.
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