In addition to providing for you and your family, your small business is a part of this country’s job creation engine. Conducting an annual review of your business finances can help keep your business healthy and growing.
No doubt you are pivotal to your company’s success. But at some point, it’s important to focus on bringing up the next level of management, especially if you would like to sell your business or pass it to family members in the future. While mentoring the key individuals who can effectively run the business, don’t forget about key person insurance for them. It’s designed to protect your business if you, a partner or another key employee were to die prematurely.
What would happen to your business if you or one of your key employees could no longer work? Unless you’ve planned ahead, the company’s continued success, continuity of management and the future of all the families your business supports could be jeopardized. Would the absent worker’s family — which could be yours — be fairly compensated for their interest in the business if that interest needed to be sold?
A buy-sell agreement combined with key person insurance can help relieve concerns you may have. Work with your financial professional and attorney to make sure the agreement is drafted properly to address your and your business’s needs.
Do you have appropriate processes and procedures in place to handle human resources and compliance issues, such as the new health care coverage rules under the federal health reform law? When was the last time you reviewed your business’s insurance coverage with your financial professional? You may discover that your business does not have all the coverage it needs in this litigious climate. Ask about umbrella and general liability insurance.