Could Your Business Run Without You?

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A VPN is an essential component of IT security, whether you’re just starting a business or are already up and running. Most business interactions and transactions happen online and VPN

6a017c332c5ecb970b017eea826334970d-320wiThis is the test of whether you own a business or a job  Back in the days when I was in publishing, I read Robert Townshend’s Up The Organization, which told the story about how he grew Avis from virtually nothing to becoming #2 behind Hertz.    While that book was about a big corporation and my publishing enterprise was in the small business category, there were some excellent lessons that I could apply.

Many small business owners assume they’ll find a ready and willing buyer – with cash – when the time comes; and it’s almost never true.

Many also never give much thought about what would happen if something bad happens beyond technical disaster-recovery concerns; but, there is another ‘disaster recovery’ issue too many ignore.

Ask yourself…

  • If you had retired, died or become disabled yesterday, who would own and manage your business today?
  •  Would you want your business interest retained for a family member, sold or liquidated?

As I indicated, the ‘cash buyer’ is a fictional character in the small business market, even when the businesses are successful.   If a family member wants to buy it, will it support two owners during the sale process?   If an outsider is involved, who will handle the transaction?   As someone who’s sold five businesses of his own, trust me, those ‘rule of thumb’ valuations aren’t worth much, either.

It’s good to get your ducks lined-up early.

Objective Issues to Consider
Retain the Business Interest for Your Family
  • Is there a capable and willing family member?
  • Will the family member be acceptable to any other business owners?
  • How will you or your surviving dependents replace the income previously provided by your business?
  • Is there a need to equalize inheritances among family members?
  • Will there be enough liquidity in your estate to pay taxes and other settlement costs?
Sell the Business Interest
  • To whom will your business interest be sold?
  • At what price?
  • And at what events (death, disability and/or retirement)?
  • What is the value of your business interest?
  • Will the funds be available to complete the purchase at your death, disability and/or retirement?
Liquidate the Business Interest
  • What is the value of your business as a going concern?
  • How does that value compare to the liquidation value of your business?
  • How will you or your surviving dependents replace the income previously provided by your business?
  • Will there be sufficient funds available to allow for a planned liquidation?

The objective of business continuation planning is to assist you in evaluating which of these alternatives is most suitable for your situation and to help provide the funds that will be needed to assure that your business continuation goals become a reality.

Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-only registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742. IFG helps specializes in crafting wealth design strategies around life goals by using a proven planning process coupled with a cost-conscious objective and non-conflicted risk management philosophy.

The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

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Interested in becoming an IFG client?  Why play phone tag?  Schedule your 15-minute introductory phone call!

Jim Lorenzen, CFP®, AIF®

Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.  IFG helps specializes in crafting wealth design strategies around life goals by using a proven planning process coupled with a cost-conscious objective and non-conflicted risk management philosophy.

Opinions expressed are those of the author.  The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

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Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.

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