At the Black Enterprise Entrepreneurs Conference, sponsored by Nationwide, in Columbus, Ohio, business leaders shared how small business owners can grow, protect and distribute wealth. Attendees were privy to insights from Mike James, president at Partners Financial; Derek Welch, senior director at Nationwide Financial’s Advanced Consulting Group; and Napoleon Andrews, agency owner at Nationwide Insurance. One of the key themes of the discussion, which was moderated by Derek Dingle, Black Enterprise magazine’s senior vice president and editor-in-chief, was the importance of insuring the future of your business and family’s livelihood. Check out a few tips on how to do just that:
Keep a big-picture, long vision mentality when planning. “Every business owner should invest in securing their futures,” said Mike James. “Think about what it means to move your business from where it is today and into the future.” Having a plan in place that ensures your business viability includes insurance for losses such as death of a founder, partner or employee or issues with worker retention. “It doesn’t become a plan until you put it on paper,” added Napoleon Andrews. “If you have a vision, you can have it in your head and think about it every day, but until you put it on paper and [create] a plan A, B, C, … that’s when you really become successful.”
The first step: Understand the market. “If you’re looking at retirement, you need to know options available to you,” Andrews added. “If you’re interested in [saving for the future], plan it and don’t be afraid to [put money aside for the future] immediately.”
Recognize the importance of insurance beyond routine requirements, and step away from the mindset of planning for losses as morbid or taboo. “We insure everything else by default—our cars, valuables, our homes,” James said. Thus, entrepreneurs should plan to protect one of their biggest assets—their enterprise.
Small business owners are urged to properly plan for retirement and get the proper life and business insurance to sustain the life of the business. Think about whether you’ve insured your business value, your value as head of the company and that of key employees, to make sure the value of one of your biggest assets as an entrepreneur is protected for the future, panelists advised.
Determining the value of a business can be done in several ways, and knowing the capital you’d need to sustain the business in the future based on current quality of life, operation expenses (for now and considering growth), and future projections for surviving in the market is key.
Timing is key, as it’s not ideal to wait until you’re faced with a triggering event such as sudden death, disability or loss of employee. “If someone were to ask you how many years of your income does your life insurance program cover, [you’ll have to] break down numbers,” Andrews said. Entrepreneurs are advised to think about how much it will cost for their families and businesses to thrive long after they’re gone and account for other expenses for their futures such as how much it will take to live out their golden years or pay for their children’s education.
Welch reiterated the importance of getting the help you need to determine what will work for your needs and those of your business. “You do not have to be an expert in any of this,” Welch added. “Start with a trusted adviser to help you with the questions you have.”