Protecting the today and tomorrow of your business is important, and most business owners recognize the broad range of different kinds of risks and challenges they face on a regular basis. Preparing for the unexpected is important because it can help you to provide a plan, to pivot and adapt your company as necessary if a sudden issue or outside threat emerges.
There are three different asset protection plans, all of which are important. This includes protecting the business, protecting your personal wealth as an entrepreneur, and protecting your own family wealth, which is especially important in light of business succession plans and business exit plans. The first step you can take to protect your company is to look for any weak links in your current value chains. Smaller companies are currently under pressure due to rising costs of doing business and extremely tight job markets. Being proactive about identifying and mitigating these risks is important. Also, look at life insurance needs and key person risks.
If an insured employee is of high value to the company, you may need to purchase a life insurance policy on them to assist with some of those transition challenges. Additionally, you also need asset protection for yourself as an entrepreneur. If you fail to incorporate this, you could overlook your own personal financial assets and put these at risks.
Working with a financial planner to identify personal and commercial assets is a good step to take in this direction. Also, determine whether or not your personal wealth is overly exposed to any country, company, or sector that is vulnerable to shocks from challenges such as economic, geopolitical, and sustainability issues. Do not forget about the importance of asset protection planning for your family.
Uncertainty has been at the top of news headlines for the past couple of years. But concerns that business assets will not be properly protected by family members are one of the most common reasons that entrepreneurs fail to put business succession plans into place. Make sure that you consult with an experienced and a knowledgeable estate planning and asset protection planning lawyer to discuss how you can mitigate these risks.