I
recently attended a workshop in Chicago that focused on closely held business
transition planning. I was interested in
attending this workshop due to my goal of ensuring an ironclad succession and
disaster plan for our firm and to be better able to advise many of our clients
who are entrepreneurs and business owners.
As
the owner of a closely held business for over eleven years I have tried hard to
focus on the following mantra and which is the crux of what this seminar dealt
with:
Working
on your business, rather than just in it!
Sometimes
a business can be humming along, increasing its net worth and profit margins,
while the business owner overlooks potential major issues that can threaten its
very existence. This is rarely done
intentionally or out of neglect, it is just that he or she is simply distracted
by all of the progress being achieved.
Many
businesses are devastated when those events we do not like to consider take
place such as death, disability or the loss of a key employee to an aggressive
recruiter. The seminar in Chicago taught
us how to answer the following questions.
1. Does
the business have a Succession Plan that assures continuity of the enterprise,
allocation of ownership as desired, and the full amount of cash needed for that
event?
2. Does
the Succession Plan reduce income and estate taxes, and is it coordinated with
the will and trusts established to care effectively for all family members?
3. Are
there Incentive Plans in place that provide the rewards necessary to prevent
key employees from being “poached” by competitors?
4. Are
all Business Loans (from the founder, family members, or a bank) repaid swiftly
in order to avoid default and foreclosure?
These
are not issues generally addressed by traditional internal or external
professional advisors such as the accountant and attorney. While these
professionals provide important, specific contributions such as developing
creative tax solutions or providing asset protection for the business founder
and key executives, they are not necessarily trained to uncover and determine
the possible overall impact of potential threats.
At White
House Financial we help our entrepreneurial clients bridge the gap between
their personal financial goals and their businesses. We do this by acting as their “quarterback”
and coordinating with various professionals in order to implement their overall
financial strategy. For example, the
ultimate goal for one of our clients was to ensure that his wife and children
would be properly compensated for his share of his fitness business, which he owned
with two other partners, should he cease to be able to work. We managed the process with his partners,
business valuation expert and attorney to craft and fund an agreement to
facilitate this. This saved everyone
involved considerable time and expense.
White House Financial & Settlement Consulting helps professionals and entrepreneurs live easier and less stressful lives through the proper management of their financial resources. We do this by acting as our clients’ trusted advisor and providing a personal touch customized to the client’s needs! Please visit our web site at www.whitehousellc.com or contact us directly for more information!
Please
be aware that we do not provide tax or legal advice, and that the information
set forth herein was obtained from sources which we believe reliable, but we do
not guarantee its accuracy. Neither the
information nor any opinion expressed constitutes a solicitation by us of the
purchase or sale of any securities or commodities. In addition, past performance is no guarantee
of future results. Diversification does
not guarantee against loss; it is a method used to help manage risk.
However, White House Financial & Settlement Consulting, LLC is not affiliated with Sigma Financial Corporation.
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