Professional Documents
Culture Documents
Health
Checkup
Business
Protec-on
Strategies
AXA Advisors
Agenda
The
Small
Business
Environment
Small
Business
Protec5on
Strategies
Q
&
A
Risky
Business?
small
businesses
can
also
be
more
vulnerable
to
demographic
and
economic
change.
3
out
of
10
new
employer
establishments
close
within
the
rst
two
years.1
The
annual
Small
Business
Op5mism
Index
has
been
under
100
since
2006.2
1. U.S. Small Business Administration Office of Advocacy, Advocacy: the voice of small business in government Frequently Asked Questions, www.sba.gov/sites/default/files/sbfaq.pdf, January 2011. 2. NFIB Research Foundation, NFIB Small Business Economic Trends, February 2012.
Entrepreneurship
All new ventures carry some degree of risk, but the rewards of entrepreneurship can be great!
Xfer
Protect
Use
EnOty
Structures
for
legal
protecOon
Limited
Partnerships
Limited
Liability
Companies
S-Corp
C-Corp
Protect
(contd)
Use
Systems
to
Manage
LiOgaOon
Risk
10
Protect
(contd)
Involuntary
or
Voluntary
Loss
of
Key
Person
- Who
are
the
key
people
in
your
business
- What
are
func5ons
of
Key
People
- What
are
the
business
impacts
of
losing
the
key
people
- Sales
- Prots
- Value
- Who
are
the
Replacements
11
Protect
(contd)
Assessing
the
Concern:
For
example,
if
your
current
business
partner
passes
away,
its
possible
that
his/her
spouse
could
legally
become
your
new
business
partner
The
loss
or
departure
of
a
key
employee
can
mean
the
loss
of
prot,
clients,
proprietary
knowledge
and
specialized
skills
Protect
(contd)
Assessing
the
Concern:
34%
of
Americans
feel
they
will
have
to
work
to
pay
for
living
expenses
during
re5rement.
There
is
a
46.7%
chance
that
an
employee
aged
30
will
be
disabled
for
90
days
or
more;
36%
if
aged
50
2
1 Scottrade, 2011 Scottrade American Retirement Survey Key Highlights, accessed March 2012.
2 2010 Field Guide to Estate Planning, Business Planning & Employee Benefits
13
Protect
(contd)
Key
ConsideraOons:
How
can
these
services
protect
my
business?
Buy-Sell
Agreement
Legal
agreement
that
details
what
will
happen
at
death,
disability
or
re5rement
of
a
business
owner
Key
Person
Coverage
Insurance
that
protects
the
business
against
the
death
or
disability
of
a
key
person
in
the
business
Protect
(contd)
More
Key
ConsideraOons:
Business
Overhead
Expense
Disability
insurance
allows
a
small
business
owner
to
meet
everyday
business
expenses,
throughout
the
disability
period
Disability
Buyout
If
a
partner
becomes
disabled,
policy
provides
funds
to
the
non-disabled
co-owner(s)
to
buy
disabled
partners
share
of
the
company
Savings
Liquidity to manage emergencies Group health insurance audit Par5cipate in industry associa5ons to get favorable pricing Student employees
16
Accumulate
Use
en55es
for
nancial
leverage
pre-tax
savings,
manage
income
taxes
Recruit
and
retain
Qualied
Plan
Non-qualies
Plan
Key
Considera5ons
17
Accumulate
(contd)
Key
ConsideraOons:
Which
re5rement
plan
best
suits
your
business?
Simplied
Employee
Pension
plan
(SEP)
Dened
Benet
Plan
(tradi5onal
pension)
Savings
Incen5ve
Match
plan
(SIMPLE)
Deferred
Prot
Sharing
plan
401(k)
Accumulate
(contd)
Key
ConsideraOons:
How
can
a
business
owner
priori5ze
these
benet
features?
Deduc5bility
Whether
or
not
there
is
an
employer
tax
deduc5on
Control
How
much
control
the
employer
or
employee
has
over
benets
Selectability
How
employers
can
select
who
receives
certain
benets
Transfer
Assessing
the
Concern:
Only
30%
of
family
owned
businesses
survive
the
transi5on
to
the
second
genera5on,
and
about
12%
to
a
third.
A
primary
reason
for
this
dismal
survival
rate
lies
in
poor
succession
planning.
Source: The Family Business Institute, Succession Planning, http://www.familybusinessinstitute.com/index.php/Succession-Planning, accessed March 26, 2012.
Transfer
(contd)
ProtecOon
Strategy:
Wrijen
succession
plans
outline
legal,
nancial
and
managerial
considera5ons
for
transferring
a
business
from
one
owner
to
the
next.
Goal
Transfer
(contd)
Assessing
the
Concern:
The
primary
source
of
capital
for
most
new
businesses
comes
from
savings
and
other
personal
resources.1
Approximately
75%
of
small
business
owners
do
not
have
a
wrijen
plan
for
re5rement,
while
only
half
have
consulted
a
nancial
professional
to
discuss
their
re5rement
goals.
1. Small Business Administration, Finance Start-up http://archive.sba.gov/smallbusinessplanner/start/financestartup/SERV_FINDCAPITAL.html accessed March 26, 2012 2. The American College, Small Business Owners are Unprepared for Retirement, February 2012.
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23