Long-term business planning can ensure and extend the success and profitability of a business, and protect hard-earned equity. As a business owner, you engage in a variety of planning activities to produce and market a product or service and expand the business. At the same time, you are probably asking:
• Am I getting the most I can out of my employee benefits?
• Am I providing attractive special benefits for my most valuable key employees?
• How do I exit and transition out of my business?
• How do I prepare for the problems that may come with changes in ownership due to death, disability, or retirement?
LIFE SETTLEMENTS CAN HELP FUND PRESENT FINANCIAL NEEDS
There are a number of long-term business planning strategies that can provide solutions to these issues.
Employee Benefits
How can a business owner be certain their fringe benefit program is competitive, yet affordable? When you consider that the average business owner spends more than one-third of his or her payroll on employee fringe benefits, it is imperative to get the most of benefit dollars. These concepts can structure an affordable benefit program that retains key staff and supplements the salary received from the business.
Group Insurance
rospective employees look for strong insurance programs when deciding where they will work. A business can provide a variety of programs such as medical, disability, and group life insurance. The potential income tax deductions generated by the premiums paid will reduce the cost for these much-appreciated benefits.
Qualified Pension and Profit-Sharing Plans
Employer-sponsored retirement programs help employees prepare for retirement, allowing them to take advantage of special tax breaks. In today’s competitive environment, these pension and profit-sharing plans are no longer a “fringe” benefit, they are a basic necessity. Employees are able to save with pre-tax dollars and accumulate tax-deferred earnings on their retirement funds. Contributions made to the plan by the business owner are generally tax-deductible to their business.
Disability Salary Continuation
A salary continuation plan can financially protect the owner, their key employees, and their business from the adverse financial consequences of disability. If the plan is funded with disability insurance policies, for businesses the premium payments are considered tax-deductible as a necessary business expense of the company.
Personal Financial Solutions: Personal financial solutions can be designed for key employees, including income tax strategies, insurance, and college funding. This helps employees manage their money more effectively and better positions them to achieve their personal financial goals. By improving an employee’s financial outlook, you also provide a real morale-building benefit.
Executive Compensation
Key employees are a big reason for a business’s profitability. It’s in the owner’s best interest to keep them happy by recognizing their contribution and rewarding them for it. Special financial rewards give employees assurance that he or she is sharing in the success of the business. Employers often use selective, discriminatory fringe benefits to reward those employees whose work is more responsible for creating profits.
The Ziff Agency specializes in working with business owners during long-term business planning and employing some of these strategies for long-term success. Contact us directly for a consultation.