Business vs. Personal Goals
Your business is the economic and emotional driver for you and your family. It allows you and your family to maintain an adequate standard of living. It’s also your primary investment.
And in many ways, the business is a mirror reflection of who you are and what you want to be.
It’s your business and its success allows you to realize important personal goals:
That’s why it’s important to understand your personal needs and create a plan that addresses both your business and personal
needs and understand where these needs intersect.
This joint approach can help prevent difficult financial periods in your business from impacting the plans you’ve made at home and vice versa.
Answer the following questions. If you’re uncertain, now may be the time to take a look at integrating your business and personal needs:
- What would happen to your income if you were sick or hurt and couldn’t work for any amount of time?
- Do you have the flexibility to grow your business while also providing for your family?
- Do you have a plan that leaves your most valued assets to those you love without added delays, expenses and conflicts?
- Have you planned for your own retirement needs outside of the business?
A business that is just getting off the ground has very different needs from an established business looking to expand.
Just as a business owner with young children and a new mortgage faces different needs than the business owner who plans to retire in the next five years.
Your Income
With so many demands on your time, running a business can seem like an endless job. But you also have to make sure your personal financial needs are met. This becomes even more important when your personal needs overlap with the needs of your business.
Just as you plan for risk management as part of your business cycle, so too should you include risk management as part of your personal needs in the personal planning cycle.
In risk management, the foundation of the personal financial pyramid, you begin by protecting that which is most important to you and the least you can afford to lose.
Depending upon your circumstances, this may be secured through disability insurance, life insurance or long-term care insurance.
Would your business stop running or suffer financially if you couldn’t work?
There a various types of disability insurance to consider:
Disability Income Insurance
Replaces a portion of personal earned income lost due to a total or partial disability.
Disability Overhead Expense coverage
Provide a monthly benefit for covered overhead expenses when a business owner is partially or totally disabled.
Key-Person Disability
Key-Person Disability coverage provides a benefit to the business in the event the key employee is disabled. There is no one more key to the success of your business than you.
Disability Buy-Out Coverage
Disability Buy-Out Coverage helps fund a disability buy-out agreement with installment or lump-sum payments.
What role should life insurance play in helping you build a solid financial foundation? Having a better understanding of your overall financial situation is a key step in determining what type(s) of life insurance would best meet your needs and those of your business.
Proper risk management is essential to securing your financial future. Insurance is an integral part of establishing a safety net, should something unforeseen occur. It provides protection against life events that could significantly impact your financial well being.