(Sponsored Content) — When asked about their plans to retire, more than a quarter of owners at growing businesses don't expect to retire. Ever. While that may seem like a noble approach, at some point owners will be forced to retire, often quickly or unexpectedly.
When is the last time you asked your business owner clients about their retirement plans? Our research shows they need your help when it comes to planning for the future of their business and their own financial future.
In a recent post, I shared results from our latest study, Business Owner Perspectives, where 500 business owners shared their thoughts on a wide variety of financial topics. We took a closer look at what they had to say about exit planning and a few key things stand out:
- Almost six in 10 have no written business continuation plan
- For those with a plan, life insurance is the top funding vehicle
- Only slightly more than a third have had their business valued
What this all means for you is a chance to help your business owner clients put together a game plan for how and when they will exit the business. A formal business continuation plan gives owners an action plan for both an unexpected or intended exit.
Our research shows that owners with written plans are engaged. More than half have reviewed their strategy in the past year, which means they create an opportunity for you to continue to check in with your clients. Those with a plan also have a grasp on the importance of funding their business continuation plan. Life insurance, business cash flow and disability buy-out insurance are all top choices as buy-sell funding vehicles with owners; all are good options as long as they are part of a comprehensive plan. Funding the agreement to protect against both death and disability is critical to the overall financial health of the business.
