Understanding the nature of the problem is a prerequisite to finding a solution to a problem. Anything else and you’re treating a symptom and the problem is not eliminated. Too often in business owner protection planning we only treat the symptoms which can lead to disaster. Here are a few simple ways you as a business owner can achieve better outcomes when working with financial professionals on your business protection planning.

Identify and Understand the Planning Areas

There are four primary financial protection planning areas:

  1. Succession Planning
  2. Retirement Planning
  3. Estate Planning
  4. Key Employee Planning

When you sit down with an Attorney, CPA or Financial Professional you must agree on what each planning area does and the problems they solve. If you understand Succession Planning to mean something different than your Advisor does you will not have a successful outcome. Don’t forge ahead until you are confident you are on the same page. Have a clear definition about each of the planning areas.

Define and Understand the Objectives in the Planning Areas

Take a look at Succession Planning. There are six possible ways you will exit your business. Someday you will exit your business. As a business owner you should know and understand what each of those six ways are for you and your business partners. Know and understand what problems you are going to be solving. Here too you should be in agreement with your Advisors about the six ways. Together you can make sure the planning work is complete. 

Doing this work up front saves time and eliminates many mistakes.

All Planning Areas are Interconnected

When you make a decision about your Succession Plan it will impact your Retirement Plan, Estate Plan and Key Employee Plan. All of the planning areas are interconnected. Some decisions you make could have negative side effects on the other areas.

Your Advisors serve you and must respect you enough as their client to work in positive partnership with each other and with you for your benefit. If planning is not coordinated it can result in legal disputes, higher tax bills and business disruptions.

All Planning Decisions will Impact All Stakeholders

How will your planning impact all of your Stakeholders? Before you get too deep into Protection Planning identify and keep at top of mind your company’s stakeholders. When you consider them in your planning it results in creating and maintaining the value of your business. Make sure your Advisors know who your stakeholders are.

Who are your stakeholders?

  • Family
  • Employees
  • Customers
  • Partners
  • Investors
  • Suppliers
  • Community
  • Causes

You Can Only Solve a Problem if you Understand the Problem

Now all of this is simple common sense yet too often we jump ahead before we build a solid foundation of understanding. Jumping ahead causes us to treat symptoms because we have not identified the root problems. There is great danger in only treating the symptoms.

The good news is this extra work, done up front, does not take much time. Your planning will go faster and be far more efficient. Solve the problem!

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