Businesses in the growth stage are typically generating a consistent source of income and cash flows have begun to improve. Sales are taking off and customers are creating a demand for their product or services.
As a business owner, you want to make good decisions to ensure the business can continue and you are able to manage the growth in the long term. This means keeping the key people in the business and creating a plan that allows you to prioritize risks.
Working with a team of business planning professionals such as financial planners, lawyers and accountants is vital in ensuring a proactive approach is taken to protect your growing business. Building a network of trusted advisors will help you to prioritize your goals and put strategies in place to keep and attract key employees, protect the business in case of an injury, illness or death of a key employee or owner, protect cash flow and debt, and to pay less tax.
To attract and keep top talent in your industry, you will need to begin putting programs and benefits in place to support and protect your employees. Group benefits like healthcare, disability insurance, life and accidental death insurance, critical illness insurance as well as professional services for employees like counseling for themselves and family members, should be looked at. Plans that are flexible and affordable will support attracting and keeping high level employees and people.
If you haven’t put a shareholder’s agreement in place, now is the time to work with your lawyer to establish a buy-sell agreement, and with your financial planner to ensure the proper insurance and/or other funding strategies are in order. This legal agreement between partners or co-owners puts a written plan in place to protect the business in the event of an injury, sickness or death. An agreement made now will help prevent disagreements later.
A financial planner or tax professional can also help with strategies for minimizing tax within the business and educate you on options for drawing income, investing, acquisitions and protecting cash flow.
Succession or good business planning is not just for the final years of an owner’s involvement in their business. It is planning for now and planning for the future growth of the business.
If you have any questions about your growing business or how to find a financial advisor to work with you to develop your financial plan, connect with us.