Top 10 questions for business owners

Brian A. Trzcinski

By Brian A. Trzcinski, CEPA
MassMutual specialist in business market development.
Posted on Oct 19, 2020

You want to stay focused on what matters most—your family, business, future and team—but the “what if” keep getting in the way. What if I lose a key employee…a competitor sets up shop down the street…or I can’t support my business’s growth?

MassMutual and our financial professionals believe that when you think about how to protect the business you worked so hard to build, and the family and team it supports, there are key questions you will want to ask:

What are my goals as a business owner?
Start by clarifying what you want to accomplish as a business owner. Think about what motivated you to become a business owner in the first place and use that as a basis for making your business planning decisions going forward. (Related: How business owners document success)

My business is my livelihood, who else is dependent upon its success?
While your family is commonly thought of as the most obvious dependents, there are others who count on you, such as your partners, employees and community. With your list of current and potential dependents in mind, you’ll be better prepared to plot your course toward protecting your business and minimizing the impact an unforeseen event could have on those who depend on you most.

Do I have benefits in place to attract, reward, and retain top talent?
Your key employees make valuable contributions to your business every day. The last thing you want is to lose one of them to a competitor. These days, employees are looking for benefits above and beyond the standard packages most employers already offer. These additional benefits can go a long way towards positioning your business as the employer of choice and fostering loyalty among the employees who are most critical to the success of your business.

Do I know what my business is really worth?
Knowing what your business is worth is critical for proper business planning. Keep in mind that a proper business valuation is not a “rule of thumb” or a number pulled out of thin air; it’s thoughtfully crafted by a credentialed appraiser after thorough research and it’s documented in writing. (Related: Knowing the value of your business)

Do I have a buy-sell agreement in place, and if so, is it properly funded?
A buy-sell agreement can be designed to protect your business from the four D’s – death, disability, divorce and departure. And, when a buy-sell agreement is in place, it’s important to make sure that it’s funded in accordance with the current value of the business; otherwise it won’t accomplish what you intended. (Related: Which buy-sell arrangement is right?)

Have I made my family members and key employees aware of my succession plan?
Remember that businesses can transition expectedly or unexpectedly, so it’s important to have meaningful discussions with family members and key employees early in the planning process. This includes having discussions with your potential successor to ensure he/she shares your passion for the business and has a genuine desire to keep it running successfully.

Will I have sources of retirement income beyond proceeds from the sale of my business?
The sale of your business should absolutely be a major component of your retirement income strategy – after all it’s probably your largest asset – but it’s important to have other sources of income available should you need them. There are no guarantees when the time comes to sell your business, so don’t leave your retirement contingent upon these uncertainties.

Have I taken the necessary steps to minimize my tax burden?
Educate yourself and work with a qualified tax professional to understand the tax advantages afforded to business owners. There are many factors that contribute to how you and your business are taxed, including how your business is structured, and the tax breaks you may be eligible to receive.

Do I have a coordinated team of advisors working with me?
Advisors often work independent of each other and rarely coordinate efforts on your behalf. That’s why it’s important to appoint a “quarterback” for your advisory team. A financial professional can bring the best thinking of your advisors together and work with your whole team to help create a financial strategy for the success of your business. (Related: Strong teams build strong businesses)

How do I pick the right financial professional to work with me and my business?
When choosing a financial professional, work with someone who is not only competent, but also inspires your trust and confidence. The best financial professionals are good listeners who seek to fully understand your business, and how it fits into your personal financial picture, before proposing possible solutions.

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.