Business is Personal: Why You Should Integrate Your Personal and Business Goals in One Financial Plan
If you’re the owner of a closely held business, you know there’s much to think about any time of the day or night. “What if I or my business partner gets sick or hurt? How can I attract the best people? How will I exit my business? Will I have enough income from my business to support the next phase of my life?”
At Northwestern Mutual, we believe in an integrated approach to your personal and business planning. After all, your personal finances rely on the value and success of your business. An integrated plan that addresses a variety of potential risks can protect you, your family and business at every stage of your life. And once you have addressed those risks, you can build your future with confidence.
Here are some things to consider at different stages of your journey:
When starting out, it’s important to put strategies in place to manage risks that could jeopardize your company’s success and impact your ability to earn an income. Consider how the right insurance can protect your business and income potential, especially if you or a partner can’t work because of a serious illness or injury. A disability overhead expense policy, for example, can protect a business if an injury or illness prevents you or a key member of your staff from working.
As your business grows, your integrated plan should evolve to reflect your company’s changing needs. That includes identifying ways to build a strong workforce. As an employer, you should consider providing competitive benefit packages that include health, life and disability income insurance to attract, retain and reward employees who play an integral role in the company’s success. You can also use insurance to protect the business from the loss of an owner or key employee due to death or disability.
When your business matures, you’ll want to focus on creating a well-designed and well-funded exit plan to ease your transition. An integrated exit plan will smoothly transfer your business to new owners—perhaps children and grandchildren—and will spell out how money you receive from the business ties into your personal financial plan as you move to the next stage of your life.
As a business owner, the sooner you develop a plan that integrates all aspects of planning, the sooner you can move forward with confidence. At Northwestern Mutual, we understand what’s important to you and your business. Our trusted financial professionals will work with your team of advisors to build a plan and bring you the right products to help you reach your business and life goals.
See how Kevin Harberts, owner of Kryton Engineered Metals, in Cedar Falls, IA, works with Northwestern Mutual for his business and personal financial planning.
This story also appears in the November 2, 2014, issue of Forbes.