Most owners don’t even consider what would happen to their business if they were to die or become suddenly and permanently incapacitated. Protect your business and your family.
According to the latest data from the Bureau of the Census, there are roughly 5.9 million businesses in the U.S. Virtually all of these can be considered “small.” Only 18,469 (or less than one-third of one percent) have more than 500 employees. Even getting to several dozen employees is a feat worth of recognition: over 89 percent of businesses have 20 employees or fewer on their payroll. Despite the diversity in industries, resources, location ,and stage of growth, “the 89 percent” have one thing in common: you.
When the indispensable disappears
By you, I mean an owner who is an indispensable part of the business. What would happen to your business if you suddenly disappeared for a day? How about a month? And what if you never came back? Could your business continue where you left off, or it would simply collapse and disappear into the annals of failed ventures?
Most owners are so busy trying to grow their businesses that they don’t even consider what would happen to that same business if they were to die or become suddenly and permanently incapacitated. Those that are brave enough to entertain the discussion of their untimely demise do so using the conditional “if I die” instead of the certain “when I die.” For everyone, it’s “when.”
Significant impact on family business
The odds are quite good that as a business owner, most or all of your wealth is tied to your business.
The odds are also that your family may not have sufficient life insurance to stay protected. If they are counting on your stake in the business to provide for them, that may not be realistic if the value of the business dies with you.
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Depending on the study cited, it’s estimated that most small business owners typically have anywhere from 60 percent to 100 percent of their net worth tied up in their business. The exit strategy is typically a partial or complete sale of the business at some unknown point in the future.
According to a recent study by LIMRA, a leading market research company focused on the finance sector, only 44 percent of U.S. households currently have life insurance. That’s a 50-year low. One-third of affluent families admit they don’t have sufficient life insurance to cover their needs and maintain their family’s lifestyle if the main income provider were to die.
Go to the article: Protect Your Business and Your Family from Yourself
