Financial Tips for Small Business

by Charlie Haake

Business owners confront a myriad of challenges on a daily basis.

Many are in a “survival mode” or a “reaction-ary mode.” Very few owners have the time, energy, and or expertise to reflect on important insurance, benefits, and planning strategies that provide peace of mind, improved employee morale, and cost savings.

Renewal dates for Commercial Casualty In-surance and Employee Benefits always creep up on us at the most inconvenient times. The renewal dates, typically, do not coincide, which adds more stress. Many owners make a tactical and strategic mistake by taking the lowest price. This is a mistake because price alone seldom reflects value and puts you in a never-ending cycle of “chasing price.”

The proactive approach is to select a broker who will act as your advocate. The broker should work for you and should be asking you many questions. We call this a “consultative approach.” The broker will process your information to select companies that understand and desire your business. The objective is to get a competitive quote, which may not be the “cheapest,” from a company that will value you as a customer. Your broker should find the Commercial Casualty Insurance Company that is a “match” for you and your business.

The business owner faces similar challenges when selecting an employer sponsored benefit plan. Do you select a plan solely on price? Do you want to be in another never ending cycle of chasing price?

You should select a broker to be your advocate. The broker should bring solutions to you and should help implement your program. A key part of the process is communication with your employees. Benefit programs represent a significant investment by you to benefit your employees.

You and your broker may select either a traditional plan or a consumer-driven health plan. You are balancing freedom of choice for the employee with your cost-sharing between the employer and employee.

You may feel that you have considered enough “tips” and want to direct your attention to your business. There are financial planning considerations that warrant your attention. Many people procrastinate on these matters because there is no “renewal date.” These issues relate to the impact of death or disability to a key person. Will this lead to a “fire sale” of your business?

Business owners must con-sider key planning issues such as succession planning and a formal buy-sell agreement to address disability, death and retirement. Many successful business owners avoid succession planning because they do not want to “let go” and turn the business over to their children.

You probably know the answer by now—select a broker who will be your advocate after listening to your objectives. This person will be dealing with insurance companies and planning issues. Do not confuse your broker with your accountant, attorney, or investment advisor.

You, the business owner, should select your broker based on qualifications. The broker has the obligation to put your interests first.

 

Charlie Haake is President of Haake Companies.
P | 913.491.1999
E | charlie.haake@haakeins.com