In normal times, the beginning of a new year brings excitement and anticipation about all the things you want to accomplish over the next twelve months. But 2020 was anything but a normal year. Businesses everywhere faced challenges that no one could have anticipated, and for many business owners, excitement and anticipation have been replaced by a sense of relief that they managed to make it through the year. A fresh start, with goals for the upcoming year, may be just what you need to reset your outlook and help get your business off on the right foot in 2021. Here are a few ideas to consider to help protect and strengthen your business in the coming year.
- Protect Against the Loss of a Key Employee. Have you considered what might happen to your business operations if one of your most valuable, key employees passed away unexpectedly? The death of a key employee could be catastrophic to a business – the loss of expertise, as well as the cost to hire and train a replacement, could be significant. Life insurance coverage on a key employee can help by providing funds to help cover unforeseen costs and keep the business running.
- Determine the Value of Your Business. Do you know what your business is worth? For many business owners, their business is the largest asset they own, and knowing its value is critical to any planning they may do. Methods for determining a value can range from relatively simple calculations based on the company’s past financial statements, to an in-depth appraisal. Your advisors should be able to recommend which method is most appropriate for your business based on the purpose and estimated cost.
- Evaluate Succession Plans. Do you have a written business succession plan in place? If so, are the documents up to date? Buy-sell agreements and funding should be reviewed periodically to make sure they still reflect the wishes of the owners. If you don’t have a succession plan in place yet, why not set a goal to get that done this year. Who will take over the business if something should happen to you or if you decide it’s time to retire? Better to think about your options now, when you have time to identify your successor and plan for a smooth transition.
Ask your Federated marketing representative about resources available to help accomplish some of these business goals this year.
This article is for general information and risk prevention recommendations only and should not be considered legal, coverage, financial, tax, or medical advice. The information may be subject to regulations and restrictions in your state. There is no guarantee following these recommendations will help reduce or eliminate losses. The information is accurate as of its publication date and is subject to change. Qualified counsel should be sought regarding questions specific to your circumstances. All rights reserved.
Published Date:January 19, 2021
Categories: It's Your Life