You’ve Built the Business. But Have You Protected What You’ve Built?

Business Protection, Succession Planning and Financial Planning for Business Owners

By Kathryne Lozano | Financial Representative, Forest Hills Financial Group

Building a business takes more than a good idea.

It takes long hours, difficult decisions, personal sacrifices and the willingness to keep going when things don’t go as planned.

If you’re a business owner, you probably remember your first customer, your first employee or the moment you realized your idea was becoming something real.

And today? You’re likely thinking about the next client, the next hire, the next opportunity or how to keep everything moving.

But there’s a question I believe every business owner should spend some time thinking about:

What would happen to everything you’ve worked so hard to build if you couldn’t run your business tomorrow?

Not because you’re planning to step away. Not because something is wrong. Simply because life doesn’t always follow the plans we make.

Business success isn’t only about revenue, growth or how many people you employ. It’s also about creating stability, protecting the people who depend on you and making sure the business you’re building supports the life you want.

Here are five areas worth taking a closer look at.

1. Business Protection: Could Your Company Survive Without You?

Think about how much of your business depends on you personally.

Maybe you’re the one who handles the finances, maintains the biggest customer relationships, oversees every project or makes the final decisions.

Now imagine being unable to work for several months because of an illness or injury.

Who steps in? Who has access to the information they need? How do employees get paid? What happens to your customers?

For many small and midsize business owners, these questions don’t come up until something unexpected happens.

Three questions worth asking yourself:

• Could my business continue operating if I were temporarily unable to work?

• Are there financial resources available to help cover expenses during an interruption?

• Have I considered the financial impact on my family, employees and business partners?

Business protection planning can involve several areas, including emergency reserves, key-person protection, disability coverage, operational continuity and appropriate ownership agreements.

Not every business needs the same solution. A construction company with 30 employees faces different challenges from a medical practice or a family-owned retail business.

The important thing is understanding where your business may be vulnerable before an unexpected event forces you to find out.

2. Business Succession Planning: Who Takes Over When You’re Ready to Step Away?

Every business owner eventually faces a transition.

You might want to sell your company, retire, bring in a partner, transfer ownership to your children or simply reduce your day-to-day responsibilities.

But what happens if that transition comes sooner than expected?

Consider a contractor who has spent 25 years building a successful company. He has employees, equipment, customers and a strong reputation. His family assumes the business will eventually provide for retirement.

But there’s no documented succession plan, no clear agreement about who would take over and no understanding of how ownership would be transferred.

That’s a situation worth addressing while there is still time to make thoughtful decisions.

Ask yourself:

• Do I have a clear plan for the future ownership of my business?

• Have my partners and I discussed what happens if one of us dies, becomes disabled or wants to leave?

• Do I understand how the value of my business fits into my family’s financial future?

• Have I involved the appropriate legal, tax and financial professionals?

A business succession plan isn’t just about leaving your company.

It’s about helping preserve what you’ve created, protecting the people involved and giving yourself more choices about the future.

3. Retirement Planning for Business Owners: Is Your Business Your Entire Retirement Plan?

I’ve heard business owners express a familiar idea:

“When I’m ready to retire, I’ll sell the business.”

That may be part of a perfectly reasonable plan. But what happens if the business isn’t worth what you expected when you’re ready to sell?

What if the market changes, a buyer doesn’t materialize or you want to retire earlier than planned?

Your company may be one of your most valuable assets, but it doesn’t necessarily have to be your only source of retirement security.

Building retirement savings and other financial resources outside the business can create more flexibility.

Questions to consider:

• Am I consistently saving for retirement outside my company?

• Have I explored retirement planning options appropriate for my business structure?

• Would I have financial choices if I needed to stop working earlier than expected?

• Does my retirement strategy reflect the lifestyle I actually want?

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There isn’t one retirement strategy that works for every entrepreneur.

The right approach depends on your business, income, family circumstances, goals and the time you have available.

What matters is making retirement part of the conversation while you’re still building your business.

4. Building Personal Wealth: Are You Taking Care of Yourself, Too?

Business owners are often incredibly good at reinvesting.

There’s always another opportunity: a new employee, better equipment, a larger office, another property or an expansion you’ve been considering.

And sometimes those investments are exactly what the business needs.

But I think there’s an important distinction between having a successful company and having personal financial security.

You can own a business that generates substantial revenue and still have relatively little set aside for yourself outside the company.

Consider these questions:

• Am I paying myself in a way that supports my personal financial goals?

• Do I have adequate personal emergency savings?

• Am I building assets outside my business?

• Does my financial strategy reflect where I want to be in five, ten or twenty years?

  
  

For real estate investors, developers and other entrepreneurs, this conversation can be particularly important when much of their wealth is tied to a business or concentrated in a small number of assets.

You work hard to make your business successful. Your personal financial future deserves attention, too.

5. Protecting Employees, Partners and Family: Who Depends on Your Business?

Behind every business are people.

The employees who rely on their paychecks. The family members who depend on the income. The partners who share responsibility. The customers who trust you to deliver.

When something unexpected happens to a business owner, the effects can reach far beyond that individual.

Depending on the circumstances, reviewing employee benefits, insurance protection, ownership agreements, emergency savings and business continuity arrangements may be appropriate.

Ask yourself:

• How would an unexpected event affect my family’s financial stability?

• Are my personal and business protection arrangements working together?

• Have I reviewed the benefits and protections available to my employees?

• When was the last time I evaluated whether my current arrangements still fit my needs?

As your business changes, your planning may need to change with it.

The strategy that made sense when you were working alone may not be the same strategy you need when you’re responsible for 20 employees and their families.

Why the Right Business Relationships Matter

One thing I’ve learned through my work is that business owners rarely need just one type of professional.

You may have a great accountant but need to meet a business attorney. You may have a strong financial plan but need help understanding financing options for an expansion. You may be considering selling your company and want to speak with people who have already gone through that process.

This is one of the reasons I’m excited to be involved with the 10M Network.

10M brings together entrepreneurs, business owners, investors, real estate professionals, lenders, attorneys, contractors and other professionals who can learn from one another and develop meaningful business relationships.

For me, that creates an opportunity to do more than discuss financial planning.

It creates an opportunity to understand the person behind the business.

What are you building? What’s keeping you up at night? What are you trying to accomplish over the next few years? Are there people or resources that could help?

A business owner planning an expansion may benefit from meeting someone experienced in financing. An investor might appreciate an introduction to a real estate professional. A company owner thinking about succession may need to connect with an attorney who understands business transitions.

Those introductions are never a substitute for professional advice, but having access to knowledgeable people can make a meaningful difference.

The value of a professional network isn’t simply how many people you know. It’s whether those relationships help you make better decisions, solve problems and recognize opportunities.

That’s the kind of community I’m looking forward to contributing to at 10M.

Let’s Start With a 20–30 Minute Conversation

I know business owners are busy, especially as we approach the holidays.

That’s why I’m not suggesting another event, a lengthy presentation or a complicated process.

I’d simply welcome the opportunity to spend 20–30 minutes getting to know you and your business.

We can talk about where you are today, what you’ve built, what you’re working toward and whether there are financial planning questions worth exploring.

Maybe you’re thinking about retirement. Maybe your business has grown and you haven’t reviewed your protection arrangements in years. Maybe you’re considering bringing on a partner or passing the company to the next generation.

Or maybe you’re simply interested in meeting another professional within the 10M community.

That’s fine, too.

This is an introductory conversation, not a comprehensive financial review, and there’s no obligation to purchase a financial product or service.

I believe that good business relationships begin by listening, understanding and finding common ground.

And sometimes a 20-minute conversation is all it takes to discover an opportunity to help one another.

You’ve Worked Hard to Build It. Make Sure You’re Planning for What Comes Next.

Your business represents more than revenue.

It represents years of your life, people who count on you, opportunities you’ve created and the future you’re working toward.

You deserve to think about what happens next with the same care you’ve given to building it.

If you’re a 10M member, a Long Island business owner or an entrepreneur who would like to connect, I’d love to hear your story.

Let’s schedule 20–30 minutes to talk.

Connect With Kathryne Lozano

Kathryne Lozano

Financial Representative

Forest Hills Financial Group

Phone: (917) 344-9954

Email: Kathryne.Lozano@fhfg.com

Website: www.fhfg.com

200 Broadhollow Road, Suite 405

Melville, NY 11747

Kathryne Lozano is a Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Forest Hills Financial Group is not an affiliate or subsidiary of Guardian.

This article is provided for general educational purposes and is not intended as individualized financial, legal or tax advice. Business owners should consult appropriate professionals regarding their specific circumstances.

Draft for Forest Hills Financial Group/Guardian compliance review before publication.

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