Category: Company Wealth

Where You Are – Where You Could Be!

by YOUR BUSINESS WORTH, posted in Company Wealth, Estate Costs, Estate Planning, evaluations, Income from your business, Inside Sale, Life Insurance, One Big Beautiful Bill, Passive Ownership, retirement, Uncategorized, Value drivers, Working On Your Business

Why an Annual Review Is the Most Overlooked Step in Business Owner Planning

By Thomas J. Perrone, CLU, CIC | Founder, New England Consulting Group of Guilford, Inc.

Ask most business owners how their planning is doing, and they’ll tell you it’s fine. They’ll say it with confidence, too — the same way most of us would say we feel healthy on any given day. But ask that question in the middle of a CT scan, and the confidence tends to disappear. The difference isn’t your health. It’s what you can’t see.

Business owner planning works the same way. The plans you built years ago may have looked airtight the day you signed them. But time passes, tax law changes, your business changes, and your family’s needs change — and none of that shows up on the surface. The documents still sit in the drawer looking just as official as they did the day you filed them. What they don’t tell you is whether they still fit.

We get the documents completed and executed, feel good about it, and then one morning realize it’s been five years — or more — since anyone looked at them again.

A Familiar Story

This pattern shows up constantly — with my clients, and with the professional colleagues I work alongside every day. The planning gets done. Everyone feels the relief of finally having “taken care of it.” Then life takes over, and the plan quietly ages in place while the world around it keeps moving.

The real risk isn’t skipping the planning altogether — most owners eventually get that part done. The risk is discovering, years later, that Washington has rewritten the rules, your business has grown or changed shape, your family situation is different, and no one ever flagged it. If any of those shifts would have changed your strategy, the only real question worth asking is: when would you have wanted to know?

Building the Fix Into the System

This is exactly the problem I built the GWT Planning System® to solve. GWT stands for Growth, Wealth, and Transition — the three areas every business owner’s planning needs to work together, not in isolation. But good structure alone isn’t enough. A plan that’s well designed on day one and never revisited is still a plan that goes stale.

So, from the very beginning, the GWT Planning System® was built with an automatic annual review woven directly into it — not an optional add-on, but part of how the system runs. Every year, that review happens. Sometimes it’s in person. Sometimes it’s a phone call. Sometimes it’s a Zoom conversation. The format isn’t the point. The consistency is.

That built-in review does three things for every client:

  • It catches tax and legal changes coming out of Washington before they quietly undermine a strategy that used to work.
  • It keeps the plan aligned with the business itself, which rarely looks the same from one year to the next — revenue, staffing, ownership, and value all shift.
  • It accounts for changes at home — a marriage, a health event, a child’s changing role in the business, a shift in retirement timing.

The Most Critical Part of Planning

Over more than fifty years of doing this work, I’ve come to see this as the most important part of what I do — not just putting the right plan in motion but making sure it stays right as everything around it keeps changing. A plan is not a document you finish once. a relationship you maintain.

If you can’t remember the last time your plan was reviewed against today’s tax law, today’s business, and today’s family circumstances, that’s worth changing before it becomes a costly surprise. The goal isn’t to redo the planning every year — it’s to know, every year, exactly where you stand and where you could be.

The goal isn’t to redo the planning every year — it’s to know, every year, exactly where you stand and where you could be.

If it’s been a while since your plan had a real second look, let’s put one on the calendar.

tperrone@necgginc.com

Questions? Call me.  My Calendar

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Are you Building your Business by Design…or by luck?

When Your Income Outgrows Your 401(k): The Retirement Funding Problem for High-Earning Business Owners

by YOUR BUSINESS WORTH, posted in Company Wealth, Estate Planning, Executive Benefits, Income from your business, Inside Sale, Key People_Or Group, Passive Ownership, Selling Your Business, Tax Free Income, Working On Your Business

Summary: Business owners can’t save enough for their retirement because of the cash flow demands. 401k, and profit sharing plans limit their contributions, consequently they don’t save enough for retirement and have to depend on the value of their company for their future security. Unfortunately, only a small percentage of companies sell. This creates the Gap in their retirement planning.

By Thomas J. Perrone, CLU, CIC

One of the biggest retirement planning problems facing successful business owners is not earning enough money to retire.

It is the inability to put enough money into a traditional 401(k) or other contributory retirement plan to replace the income they are accustomed to earning.

For many business owners, this problem becomes especially important during the final three to five years before retirement.

The Contribution Limitation Problem

A business owner may be earning $250,000, $300,000, $400,000, or more per year. Naturally, as retirement approaches, the owner wants to accumulate enough retirement capital to maintain a reasonable percentage of that income.

The problem is that a traditional contributory retirement plan does not necessarily allow the owner to contribute in proportion to his or her income.

The amount the owner can contribute may be affected by the plan’s design, employee participation, employee compensation, nondiscrimination requirements, and applicable contribution limits.

This creates an important question:

How do you fund the retirement needs of a highly compensated business owner when the traditional retirement plan limits how much that owner can put away?

Consider a Simple Example

Imagine a business owner earning $250,000 per year.

Now compare that owner with an employee earning $100,000 per year.

Both may participate in the same 401(k) or contributory retirement plan. Yet the business owner’s retirement income need is substantially greater.

If the owner wants to retire at a level that is reasonably close to his or her final earnings, the amount that can be accumulated through the traditional plan may not be sufficient.

The employee earning $100,000 may have a much more manageable retirement funding objective.

The owner earning $250,000 has a much larger gap to fill.

And this becomes even more significant when the owner is only a few years from retirement.

The Last Three to Five Years Can Be Critical

Many business owners spend decades building their companies.

They reinvest profits.

They purchase equipment.

They hire employees.

They expand facilities.

They build working capital.

They grow the value of the business.

As a result, much of their wealth may remain inside the business rather than inside a retirement account.

Then, three to five years before retirement, the owner begins asking:

“How am I going to turn the value I’ve created in my business into retirement income?”

That is when the limitations of a traditional contributory retirement plan can become particularly apparent.

Trying to solve a lifetime retirement accumulation problem during the final few years with a plan that has contribution limitations may simply not work.

The Real Issue May Not Be Your Retirement Plan

This is why I believe business owners need to look beyond the question:

“How much can I contribute to my 401(k)?”

The more important question may be:

“How am I going to convert the wealth I’ve created in my business into the retirement income I want?”

Those are two very different questions.

A 401(k) is an important retirement planning tool. But for a successful business owner, it may be only one piece of the overall strategy.

The business itself may represent the owner’s largest asset.

The challenge is developing a coordinated strategy for:

  • Building business value
  • Protecting business value
  • Accumulating retirement assets
  • Creating additional sources of retirement capital
  • Reducing unnecessary taxes
  • Preparing the business for transition
  • Converting business equity into personal wealth

Don’t Wait Until Retirement Is Five Years Away

The earlier this issue is addressed, the more alternatives may be available.

If you are a business owner earning substantially more than your employees, don’t assume that maximizing your 401(k) contribution automatically means you have maximized your retirement planning.

Your business may be producing significant income today while simultaneously creating a retirement funding gap for tomorrow.

Most business owners don’t have a retirement savings problem. They have a business planning problem.

The goal should not simply be to put as much money as possible into a qualified retirement plan.

The goal should be to develop a coordinated strategy that allows you to grow, protect, and eventually transition the value of your business into the financial resources you will need after you stop working.

That requires looking at the entire picture—not just the retirement plan.

The Bottom Line

If you are a highly compensated business owner, especially one earning $250,000 or more, take a close look at the relationship between your current income, your retirement income goal, your retirement assets, and the value of your business.

If there is a significant gap, don’t wait until the final few years to discover it.

Your business may be your greatest retirement asset—but only if you have a plan for turning its value into personal wealth.

DOWNLOAD YOUR FREE “JFK ERA BENEFITS REPORT FOR BUSINESS OWNERS” and learn how high earning business owners are creating tax advantaged retirement plans.

CLICK HERE

Video:  Endorsement RETIREMENT PLAN

If you have an interest in discussing your planning please call.

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The Cheapest Way to Fund a Buy-Sell Agreement

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, Funding your Buy and Sell, Income from your business, Inside Sale, Life Insurance, Selling Your Business

By Thomas J. Perrone, CLU, CIC

Picture this: you and your business partner built something real together. Four million dollars in value, split fifty-fifty. Then, out of nowhere, your partner passes away. His widow now owns half your company. She doesn’t want to run it. She wants her money — now.

If that thought makes your stomach drop, you’re not alone. And here’s the uncomfortable truth: having a buy-sell agreement doesn’t mean you’re actually prepared for this moment.

Your Buy-Sell Agreement Is Only Half the Plan

Most business owners think a buy-sell agreement has them covered. It names a price. It names the terms. It says, in black and white, what happens when a partner leaves — through death, disability, divorce, or simply deciding to walk away.

But an agreement is only the what. It says nothing about the how. How does the money actually move from the surviving owner’s pocket into the widow’s hands? That question is where most buy-sell arrangements quietly fail — not in a courtroom, but at the bank, when it turns out the cash simply isn’t there.

Without a funded plan, owners are usually left with one of three bad outcomes:

– A fire sale — the business gets sold fast, often to a stranger, just to raise the cash.

– A forced partnership — you end up running the company with someone who never wanted to be your partner.

– The bank calls the loans — lenders get nervous about ownership uncertainty and tighten the noose.

None of that is good. And all of it is avoidable — if you fund the agreement properly, ahead of time.

The Three Ways to Fund a Buyout

Let’s use a simple example: a $4 million business, owned 50/50, with a $2 million buyout obligation. There are three real ways to cover that number.

Option 1: Cash

The instinct for a lot of owners is to just save up. Sounds responsible enough — until you run the numbers.

If your business generates $400,000 a year in distributable profit, split evenly, that’s $200,000 per partner. To fully self-fund a $2 million buyout, you’d need to set aside your entire share of profit for ten years. No raises. No reinvestment. No growth. Just money sitting there, doing nothing, in case the worst happens.

And here’s the problem nobody wants to say out loud: what if the event happens in year two? You’re $200,000 into a $2 million obligation, and your business has spent two years running on fumes because all its profit was parked in a savings account instead of working.

Cash funding only works in one scenario: if you never actually need it. The moment you do, it’s never enough.

Option 2: Borrowing

The next instinct is to borrow — a bank loan, or a note payable to the estate over time.

On a $2 million buyout, financed over ten years at 7%, you’re looking at roughly $28,000 a month. Over the life of that loan, total interest adds up to about $800,000 — money that leaves your business permanently and goes straight to the bank.

And the interest isn’t even the biggest problem. Borrowed money comes with strings: personal guarantees, the business pledged as collateral, and payments due no matter what — recession or not, lost customers or not. On top of that, a departing partner’s estate has little reason to accept a slow note when the agreement says they’re owed full value now. Notes get renegotiated. Disputes happen. And the business you’re trying to protect ends up in court anyway.

Cash starves the business. Debt mortgages it. Which brings us to the option that actually works.

Option 3: Life Insurance

Here’s the idea, and it’s refreshingly simple. You take out a life insurance policy on your partner. The business — or a properly structured trust — owns the policy and pays the premium. When your partner passes away, the death benefit arrives tax-free, within weeks. That’s your buyout, fully funded, on the spot. No fire sale. No note. No bank involved.

For a healthy partner in his fifties, a $2 million death benefit typically costs somewhere between $20,000 and $40,000 a year in premium, depending on how it’s structured.

Now compare that to the alternatives:

| Funding Method | Cost Profile | Key Risk |

  1. Cash (self-funded) | $200K/yr of profit for 10 years | Starves the business; badly exposed if the event happens early |
  2. Borrowing | ~$28K/mo; ~$800K in total interest | Collateral, personal guarantees, payments due regardless of performance |
  3. Life Insurance (trust-owned) | ~$20K–$40K/yr premium; full coverage from day one | Requires correct ownership structure and an insurable partner |

The number that tends to get people’s attention: a trust-owned life insurance approach runs roughly 74% less expensive than the next best option. And unlike cash, the coverage is fully in place from day one — not after a decade of saving.

How to Structure the Policy

Once you’ve decided insurance is the right tool, you still have to structure it correctly. There are two standard approaches.

Cross-purchase agreement. Each partner personally owns a policy on the other. When one dies, the survivor collects the death benefit and buys the deceased partner’s shares directly. Simple, clean, and it works especially well with two partners.

Entity purchase (stock redemption). The business itself owns the policies and buys back shares from the deceased partner’s estate. This tends to be easier to administer when there are three or more partners involved.

Which one is right depends on your entity type. C-corporations can run into alternative minimum tax issues under certain structures. S-corporations raise their own questions around ownership and basis. This is exactly the kind of decision that shouldn’t come from a template you found online — the structure you choose has tax consequences that can follow your family for a generation.

The Advanced Move: Trust-Owned Insurance and Key Person Coverage

If you want to do this the smart way, there’s a more sophisticated layer worth knowing about.

Irrevocable life insurance trusts. Instead of you or the business owning the policy, a trust owns it. Why bother? Two reasons. First, it keeps the death benefit out of your taxable estate — for owners with real net worth, that can mean millions in estate tax the family never has to pay. Second, the trust controls the timing and terms of the payout, so the proceeds go out exactly as the agreement says, instead of becoming a bargaining chip.

Key person insurance. This is a different tool entirely — it protects the business, not the ownership transfer. If you’ve got a key employee who runs operations or holds your most important customer relationships, their death would hit the business hard: lost revenue, lost relationships, a scramble to replace them. Key person coverage puts cash into the business to bridge that gap. It’s not for the buyout. It’s for survival. Any business with roughly five to fifty employees should have this on the radar.

Four Mistakes That Cost Owners the Most

1. Buying term insurance that expires. Buy-sell needs are permanent — you can’t predict the year something happens. Permanent coverage is the honest answer.

2. Getting the policy ownership wrong. If the person who owns the policy isn’t the same person who owes the buyout, the death benefit can trigger a tax problem and defeat the whole plan.

3. Letting the valuation go stale. The agreement says $4 million, but the business is now worth $9 million. That’s not a plan anymore — it’s a time bomb.

4. Assuming your partner is insurable. If there’s a health issue, you want to know now, while you can still get coverage — not after it’s too late.

What to Do This Week

You don’t need to overhaul everything today. Start here:

1. Pull your buy-sell agreement and ask the honest question: is this actually funded, or does it just look funded on paper?

2. Get a life insurance illustration on your partner. Just the numbers — no commitment required.

3. Have the conversation with your partner. It’s awkward, sure. But it’s a lot less awkward than the widow, the fire sale, or the bank calling your loans.

A buy-sell agreement is only as good as its funding. Of the three options — cash, borrowing, and life insurance — insurance, especially when trust-owned, is the one that’s cheapest, fastest, and most reliable when it actually matters. Get the funding question answered now, while everyone’s calm and thinking clearly, so the only thing left to work out later is the number.

Download your free BSA report Guide-  CLICK HERE

Check This Article called “Connolly Alternatives: 

Need to discuss:  Toms Calendar. 

Seven Things Buyers May Pay More for When Purchasing a Business

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, evaluations, Inside Sale, Key People_Or Group, Passive Ownership, retirement, Selling Your Business, Strategies of growing business, Tax Efficient, Valuation, Value drivers, Working On Your Business


By: Thomas J. Perrone, CLU, CIC

How to Build a More Valuable and Transferable Company

Many business owners ask:

What is my business worth?

That is an important question. But an even more valuable question may be:

What can I do today to make my business worth more in the future?

When buyers evaluate a company, they are not simply looking at past revenue. They are evaluating the company’s ability to generate future cash flow—and the risks that could prevent that from happening.

Businesses with dependable earnings, strong customer relationships, capable employees, effective systems, and less dependence on the owner may be more attractive to buyers.

Here are seven things buyers may be willing to pay more for because you build the business around strong value drivers. 

1. Predictable and Growing Cash Flow

Revenue is important, but consistent profits and reliable cash flow are often more meaningful.

A company with steady earnings may be more attractive than a company with higher but unpredictable profits. Buyers want confidence that the business can continue generating cash after the sale.

Business owners should focus on improving profit margins, controlling unnecessary expenses, and creating a history of dependable financial performance.

2. Recurring Revenue and Strong Customer Relationships

Recurring revenue can make future earnings easier to predict.

Service agreements, subscriptions, maintenance contracts, memberships, and repeat customers may provide greater visibility into future revenue.

Buyers may also look at customer retention and customer concentration. A company that depends heavily on one or two customers may present more risk than a business with a broad and diversified customer base.

An important question is:

Are customers loyal to the company—or primarily loyal to the owner?

Customer relationships that can continue after the owner leaves may increase the company’s transferability.

3. A Business That Can Operate Without the Owner

Owner dependence can reduce business value.

If the owner is responsible for most sales, customer relationships, major decisions, and daily operations, a buyer may question what will happen after the owner leaves.

A useful test is to ask:

Could the company continue operating successfully if the owner were absent for 30, 60, or 90 days?

transferable it may become.

4. A Strong Management Team and Capable Employees

Buyers are not only acquiring the company’s assets. They may also acquire the knowledge and experience of their employees.

A capable management team can provide continuity and help the business maintain its performance after a sale.

Business owners should identify key employees, develop future leaders, and create strategies that encourage important people to remain with the company.

A business with leadership depth may be less dependent on any one individual.

5. Documented Systems and Operating Processes

Businesses are often more transferable when important processes are documented and repeatable.

Written procedures for sales, employee training, customer service, pricing, quality control, and financial management can help a buyer understand how the company operates.

Strong systems may also improve consistency, reduce errors, and make the business easier to manage.

The goal is to build a company that operates through reliable systems—not simply through the owner’s experience and memory.

6. A Sustainable Competitive Advantage

Why do customers choose your company instead of a competitor?

Your advantage may be a compelling reputation, specialized expertise, proprietary technology, a recognized brand, a unique service model, or long-term customer relationships.

The key is whether that advantage is sustainable and difficult for competitors to duplicate.

A strong competitive position may help protect customer relationships, support healthy profit margins, and create greater confidence in the company’s future.

7. Clean Financial Records and Lower Business Risk

Buyers need to understand the company’s financial performance.

Accurate and timely financial records can make it easier to evaluate revenue, expenses, profits, cash flow, and future opportunities.

Buyers may also examine risks involving customer concentration, debt, legal issues, insurance, technology, employee obligations, and ownership agreements.

Reducing risks can be just as important as increasing revenue.

The Common Factor: Buyer Confidence

These seven value drivers have one important thing in common:

Buyers may pay more when they have greater confidence in the future of the business. 

They want confidence that:

– Cash flow will continue.

– Customers will remain.

– Employees and management can operate the company.

– Systems are documented and repeatable.

– The company has a sustainable competitive advantage.

– Financial information is reliable.

– Business risks are identified and managed.

Two companies with similar revenue and profits may receive very different valuations because one is more predictable, less dependent on its owner, and easier to transfer.

Build Value Before You Need to Sell

Business owners should not wait until retirement is approaching to begin building value.

Improving cash flow, developing management, documenting systems, reducing owner dependence, and strengthening customer relationships may take years.

These improvements can benefit the owner even if the business is never sold. A stronger company may produce greater profitability, reduce owner stress, improve operational efficiency, and provide more choices for the future.

Through the GWT Planning System®, Business owners can evaluate where their company is today, identify opportunities to build and protect value, and develop strategies for converting business equity into future financial security.

The goal is not simply to build a business that someone else wants to buy.

The goal is to build a business worth owning, worth protecting, and worth paying more for. 

tperrone@necgginc.com

Wish To Discuss Lets Talk:  Toms Calendar

203.530.6615

Website: www.bpbpgrp.com/Tom

Resources:

Free Download Business Building Guide Call “  Growing Your Business On Purpose”

Podcast: What Buyers Really Look For When buying Your Business!

How to Identify and Solve the Problems Holding Your Business Back

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Income from your business, Inside Sale, Key People_Or Group, Passive Ownership, retirement, Selling Your Business, Strategies of growing business, Tax Efficient, Team

A Simple Business Planning Process for Growth, Value, and Future Freedom

By Thomas J. Perrone, CLU, CIC

Most business owners are excellent at solving immediate problems — customer concerns, cash flow, staffing, vendor issues. What often gets neglected are the larger problems quietly limiting growth, value, and future options.

The greatest danger isn’t having problems. It’s failing to identify the ones that could affect your business’s future — and your own financial security.

That’s the purpose of the One Page Solution: a simple process for evaluating your company, identifying the most important issue, and taking manageable steps toward a solution — one problem at a time.

Growth and Transition Are Connected

Business owners tend to treat growth and transition as separate issues. They aren’t.

Growth is about the systems, people, and performance that build a stronger company. Transition is about your eventual exit — retirement, sale, family succession, or an unexpected disability or death.

The two are linked: greater profitability creates options for personal wealth and retirement security, while your personal goals (retiring in five years? reducing involvement? no clear successor?) shape the decisions you make in the business today.

The One Page Solution Framework

Start with one question: What is the most important problem that could prevent you from reaching your business and personal goals?

Then map it out:

  1. The problem — what needs addressing
  2. The consequences — what happens if it’s ignored
  3. The desired outcome — what success looks like
  4. The roadblocks — what could get in the way
  5. The action steps, owners, and timeline — who does what, by when
  6. The review process — how you’ll track progress

You don’t need to fix everything at once. One important problem. One practical solution. One step at a time.

A Job vs. a Business

Ask yourself: Could you leave your business for three months without checking in, and still expect it to run well?

If not, the company may depend too heavily on you — which means you’ve built a job, not a transferable business. A buyer doesn’t want to purchase your personal effort; they want a company with systems, culture, and a management team that can operate without you.

Identify Roadblocks Early

Every strategy has roadblocks — a management gap, an under-financed buyer, too much personal wealth tied up in the company. Naming these early gives you time to solve them before they become forced decisions driven by illness, a downturn, or an unplanned sale opportunity.

Small Steps, Coordinated Advisors

Building value and preparing for transition takes time, but the first step can be small: review your company’s value, document one key system, or schedule a meeting with your advisor team (accountant, attorney, financial advisor, valuation professional). Coordinating their efforts — not just having them — is what drives results.

Start With the Right Question

If you had to leave your business tomorrow, would it continue to succeed — and would you be financially prepared?

Your answer points to the one issue worth solving first. Identify it. Understand the consequences. Define the outcome you want. Then take the first step.

Ready to identify what’s limiting your company’s growth, value, or future options? Schedule a conversation to start building a practical strategy for building and protecting your business worth.

Thomas J. Perrone, CLU, CIC is a business planning professional, author, and host of the podcast Building and Protecting Your Business Worth.

About the Author

Thomas J. Perrone, CLU, CIC is a business planning professional, author, and host of the podcast Building and Protecting Your Business Worth. He works with business owners to help them build business value, protect the company from unexpected events, develop strategies for business transition, and convert business success into long-term personal financial security.

Ready to identify the problems that may be limiting your company’s growth, value, or future options?

Schedule a conversation to discuss your business goals and begin developing a practical strategy for building and protecting your business worth.

 

For A full Report Click Here:

tperrone@necgginc.com

www.bpbpgrp.com/tom

YouTube: THE THREE UNAWARE MISTAKES business owners make!

POdcast: Hidden Dangers Every Business Owner Needs to Address

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You Built the Business. Now Let’s Make Sure It Pays You Back.

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, Income from your business, retirement, Selling Your Business, Uncategorized, Valuation, Value drivers, Working On Your Business

By: Thomas J. Perrone, CLU,CIC -New England Consulting Group of Guilford, Inc.

A planning system that helps business owners build value in their business,  stop overpaying taxes, stop losing wealth, and creates  business value and aa path so they can walk away from their business with their wealth, and on their own terms.

The Problem

“Many business owners struggle to build personal wealth because business cash flow demands keep their money tied up. Our three-step process creates financial clarity, helps reduce wealth lost to taxes and uncertainty, and positions owners to walk away wealthy when it’s time to exit.”

Most business owners struggle with creating future wealth for their personal economic security because their businesses require so much of the financial resources and cash flow to continue to operate and grow the business.

You started with nothing but an idea and a willingness to outwork everyone else. Years later, you’ve built something real — payroll, customers, a name people trust.

But here’s what nobody tells business owners: most of your wealth is trapped. It’s tied up in a business that’s hard to value, harder to sell, and taxed at every turn. Your “retirement plan” is a vague hope that someone, someday, will buy the company for what it’s worth.

Meanwhile, every year you wait:

  • You overpay taxes on money you’ve already earned
  • Inflation and poor structuring quietly erode what you’ve built
  • Your business becomes more dependent on you, not less — which makes it harder to sell or step back from

You didn’t spend decades building this business just to hand the upside to the IRS, or to find out too late that no one wants to buy it.

You built it so you could walk away wealthy.

The Guide

That’s the problem I solve for with business owners — not as a generalist financial advisor, but as a specialist in one specific question:

How do you turn the value locked inside your business into wealth in your own hands?

I understand how hard you’ve worked—and how much of that effort has yet to become personal wealth. I learned this firsthand when my father died at 51 with nearly all his business value trapped inside the company. The company was ultimately sold for pennies on the dollar. The heartbreak my family endured motivated me to make sure other business owners would never have to experience a situation like ours.

A Three Step System to Extract the Wealth You’ve Built When You Need It the Most!

#1 GROW — Find out what your business is worth AND if you are taking advantage of all the planning opportunities available to you. A three-minute survey, called the Business Owners Personal Viewpoint, gives us enough info to create a “WHERE YOU ARE REPORT”. (A Barometer of your business).

We start with a clear-eyed look at your business value today, and what’s driving — or hurting it. Also, what areas of your planning are effective and ineffective up to now!

#2 PROJECT WEALTH — Stop the leaks- and missed opportunities!

We find where you are overpaying in taxes and where your personal wealth is exposed — then fix it. “OUR DISCOVERY REPORT”

#3 TRANSITION — Build your exit before you need it

We build the plan that lets you leave the business — by choice, not by crisis — with the money in your pocket, not just the memories. It is a plan by “Design” and not a plan by “Default”.

Resources:

Check out this video:  “Business Owners Getting This Wrong: A trapped Retirement plan. 

Get your Free Report: Building Wealth Through Your Business!

Want to discuss, use my calendar:  Toms Calendar  

 

 

Traction: Get a Grip on Your Business

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Passive Ownership, retirement, Selling Your Business, Strategies of growing business, Valuation, Value drivers, Working On Your Business

Traction: Get a Grip on Your Business

by Gino Wickman

Letting Go of the Vine

Get a Grip on Your Business

FROM GINO WICKMAN’S TRACTION

By Thomas J. Perrone, CLU, CIC

Overview

Before Wickman introduces the Six Key Components of the Entrepreneurial Operating System (EOS), he uses to address a mindset barrier that stops many owners from ever adopting the system in the first place. The chapter’s central image is an entrepreneur clinging to a vine, unwilling to release it even though holding on is what’s limiting the business’s growth. Wickman’s point is that real progress requires a leap: letting go of old habits and control patterns so the business can reach the next stage, much as a person swinging through a jungle must release one vine to grab the next.

He frames this as a deliberate choice among three options available to any frustrated owner:

  1. accept the business as it is,

  2. walk away from it, or

  3. commit to changing it.

This article is written for owners who choose the third path.

One of the most important drivers of business growth is having the next level management team in place and a team that communicates with leadership, and sees the leadership vision. This sounds easier than it is. Without the next level management, the value of a company is tremendously discounted, if even a consideration on the market by purchasers.

I believe building the “team” is the most profitable task owners can engage in as it is their future profitability. It is also one of the most challenging task, but very doable.

Four Fundamental Beliefs

Wickman argues that before EOS tools can work, leadership has to internalize four beliefs:

1. Build and maintain a true leadership team. — A small group who together define and champion the company’s vision, hold clear accountabilities, and act for the good of the whole organization rather than just their own department.

2. Hitting a ceiling is inevitable. — Growth naturally creates limits — organizationally, departmentally, and personally — and those ceilings have to be anticipated and broken through repeatedly, not treated as failure.

3. Run the business on a single operating system. — Rather than stitching together a patchwork of borrowed management ideas, the organization commits to one consistent system, applied the same way at every level.

4. Stay open-minded and vulnerable. — Leaders need enough humility to admit they don’t have every answer, which is what allows new tools and honest feedback to actually take hold.

Five Leadership Abilities for Breaking Through the Ceiling

To act on belief #2 — pushing past inevitable ceilings — Wickman says leaders must build five specific abilities:

1. Simplify. — Strip unnecessary complexity out of the business so people and processes are easier to manage.

2. Delegate and elevate. — Hand off work you’ve outgrown so both you and your people can focus on the responsibilities that best fit them.

3. Predict. — Build the discipline of long-term and short-term forecasting instead of reacting to problems as they land.

4. Systemize. — Turn recurring work into repeatable processes so outcomes don’t depend on any one person’s memory or effort.

5. Structure the company correctly. — Design an organizational structure that fits where the business is headed, not just where it’s been.

Why This Matters

Wickman’s underlying message is that most owners aren’t held back by a lack of information — they already have what they need to change. What’s missing is the willingness to release direct personal control: to trust a real leadership team, commit to one system, and let go of habits that made sense at a smaller scale but now cap the business’s growth. This chapter functions as the mental preparation for the rest of the book, setting up why the Six Key Components (Vision, People, Data, Issues, Process, and Traction) are worth the discipline required to implement them.

Video: Your Business Isn’t Worth What You Think-Here’s Why

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Are You Building Your Business by Design… Or by Luck?

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, evaluations, Uncategorized

Are You Building Your Business by Design… or by Luck?

A Four-Pillar Framework for Turning Business Success into Lasting Personal Wealth

By Thomas J. Perrone, CLU, CIC | tperrone@necgginc.com

Executive Summary

Most small business owners don’t lack ambition — they work hard, grow steadily, and reinvest everything back into the company. Yet many reach a point where an uncomfortable question surfaces: is the business growing by design, or simply by default? While revenue climbs, critical areas such as financial planning, risk protection, tax efficiency, and long-term transition are frequently overlooked, not from a lack of care but from a lack of time, clarity, or structure.

This white paper summarizes a structured planning approach — often referred to as a “Destiny Plan” — that aligns a business with its owner’s ideal life and financial future. Rather than adding complexity, the framework organizes the essential drivers of long-term success and security into four pillars: Growth, Protection, Equity, and Transition.

The Hidden Gaps in Growing Businesses

Business owners are often aware, sometimes painfully so, that critical elements of their business are being neglected. Common gaps include:

  • No clear long-term growth strategy
  • Limited protection against unexpected events
  • Inefficient tax planning
  • No defined exit or succession plan
  • Uncertainty about how to convert business success into personal financial security

Left unaddressed, these gaps mean that even an outwardly successful business can remain financially fragile.

The Questions Every Business Owner Should Ask

A useful starting point is self-assessment. Consider the following:

  • Do you have a clear, fail-safe plan to grow, protect, and eventually transition your business?
  • If you had to step away tomorrow — due to retirement, disability, or worse — what would happen?
  • Could you extract your business value in the most tax-efficient way possible?
  • Are you maximizing your compensation and benefits through your business?
  • Do you have a plan for the unexpected — economic downturns, key employee loss, or sudden life events?

Difficulty answering any of these is a signal, not a source of alarm: it indicates that planning is overdue, and that the owner is far from alone in facing this gap.

The Four-Pillar Framework

What most business owners need isn’t more complexity — it’s clarity. A structured approach brings together the key elements that drive long-term success and security into one cohesive strategy, built on four essential pillars.

1. Growth: Building with Purpose

Growth should be intentional, not accidental.

  • Implementing systems that scale with the business
  • Developing strong leadership and teams
  • Focusing on the true drivers of business value

2. Protection: Preparing for the “What Ifs”

Every business faces risk. The question is whether you’re prepared.

  • What if a key employee leaves?
  • What if cash flow tightens?
  • What if you can’t continue running the business?

Proper protection planning ensures the business can withstand the unexpected.

3. Equity: Turning Success into Wealth

Your business is likely your largest asset — are you leveraging it effectively?

  • Accessing equity without unnecessary tax burdens
  • Structuring compensation to maximize benefits
  • Building wealth both inside and outside the business

The goal is not just to grow a business — it’s to create real, usable wealth.

4. Transition: Planning Your Exit Before You Need It

Every business owner will eventually leave their business. The only question is how.

  • Will it be on your terms?
  • Will you receive full value?
  • Is your family or team prepared?

A well-designed transition plan enables an exit that is smooth, efficient, and profitable — whether through sale, succession, or retirement.

A Simple First Step

Owners don’t need to solve everything today — but they do need to start. Even a quick self-assessment can reveal where the biggest opportunities lie. Small adjustments in the right areas can lead to significant improvements in both business performance and personal financial outcomes.

Conclusion

A business should serve its owner’s life, not the other way around. With the right planning, an owner can move from uncertainty to clarity, from reactive decisions to intentional strategy, and from simply building a business to building a lasting legacy. The core question remains: are you ready to start designing your future — on purpose?

TAKE THE FREE BUSINESS OWNER 3 MINUTE SURVEY: With this survey we will send you a report of where you are in your planning today vs. the areas you should revisit to maximize your planning we call this the “Where You Are, and Where You Could Be!” DOWNLOAD

Download your free “Growing Your Business Guide With GWT PLANNING SYSTEM® Download

Also, if you would like to discuss your current situation, I would be happy to help you with a discussion, feel free to contact me: MY Calendar

Youtube:  The Business Owners Who Plan vs. Everyone Else: Luck or Design

Thomas J. Perrone, CLU, CIC | tperrone@necgginc.com

Why Most Businesses Never Reach Their Full Value And the One Shift That Changes Everything

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Selling Your Business, Strategies of growing business, Valuation, Value drivers, Working On Your Business

By Thomas J. Perrone, CLU, CIC

This article discusses business growth, increasing business value and business planning. Why some companies grow and other don’t grow. 

Most business owners assume that if revenue keeps climbing, value climbs right along with it. It’s a reasonable assumption — more sales should mean the company is worth more. But revenue and value are not the same thing, and mistaking one for the other is one of the most expensive misunderstandings an owner can carry for 20 or 30 years.

Revenue measures what a business did last year. Value measures what a buyer believes it will do next year — without you. That single distinction is the reason so many profitable, well-run companies still fall short of their full value when the time comes to sell, recapitalize, or pass the business on.

A business that cannot run without its owner isn’t really a business to a buyer. It’s a job. And jobs don’t sell for much.

The Real Reason: Value Is Built by Structure, Not Activity

Owners who work harder every year often assume that effort alone will be rewarded at exit. But buyers, banks, and private equity firms don’t pay for effort — they pay for transferable, durable cash flow. That requires structure the business owner rarely has time to build, because they’re too busy running the business to build the business.

In our GWT Planning System® — Growth, Wealth, Transition — we see this pattern constantly. Owners pour everything into Growth, assume Wealth will follow automatically, and treat Transition as a someday problem. By the time someday arrives, the gap between what the business earns and what it’s actually worth has become impossible to close quickly.

The Four Traps That Quietly Cap Value

In our work with business owners, four recurring traps show up again and again — often overlapping, always compounding:

  • Owner Dependency — sales, key relationships, and critical decisions all run through one person. Remove that person, and much of the value disappears with them.
  • Cash Flow — the business generates activity, not predictable, bankable cash flow a buyer can underwrite with confidence.
  • What-If — no plan exists for disability, death, partner disputes, or a sudden offer to buy. Without a plan, the business (and the family) absorb the full shock.
  • Exit — there’s no timeline, no valuation benchmark, and no transition plan, so “someday” keeps sliding further into the future.S

What Buyers — and Full Value — Actually Require

Businesses that command premium valuations share a few traits in common, and none of them are about being the biggest company in the room:

  • Documented systems instead of knowledge that lives only in the owner’s head
  • A management team that can run operations without the owner present
  • A diversified customer base, so no single relationship can sink the company
  • A clear, credible growth trajectory a buyer can step into and continue

None of these require the owner to work more hours. They require the owner to work differently — shifting time and attention from working in the business to building the business’s transferable value.

The Good News

This is entirely fixable, but it isn’t fixed overnight. Most owners need a runway of three to five years to move a business from owner-dependent to fully transferable — which is exactly why the planning has to start well before you think you’ll need it.

The earlier that shift begins, the more options an owner has when it’s time to transition: a strategic sale, a transfer to family or key employees, or simply the freedom to step back without the business falling apart. Owners who wait until they’re ready to sell before addressing these gaps almost always leave money, and options, on the table.

The goal isn’t just a good business that provides a good living. It’s a valuable business — one that thrives without you, and that someone else will pay top dollar to own.

Below download the Definitive Guide To Value Drivers. FREE.

For more information view this video: https://youtu.be/5hfj0IvCXx0

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Definitive Guide To Value Drivers

What Buyers Really Look For When They Buy a Business

by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Company Wealth, Estate Costs, Funding your Buy and Sell, Income from your business, Key People_Or Group, Life Insurance, Life Insurance Types, Transfer Costs, Value drivers, Working On Your Business

 What Buyers Really Look For When They Buy a Business

It’s Not Just About Profits—It’s About Confidence

By Thomas J. Perrone, CLU,CIC

Many business owners assume that if their company is profitable, buyers will line up and pay top dollar when it’s time to sell. Unfortunately, that’s rarely how the market works AND how a transition of their business happens. Professional buyers don’t simply buy earnings—they buy certainty when purchasing a business. They want confidence that the business will continue to produce predictable profits after the current owner walks away. The less risk they see, the more they’re willing to pay. Whether you plan to sell in three years or twenty, understanding what buyers value today gives you the opportunity to dramatically increase the value of your business before you ever put it on the market.

Buyers Want Predictable Cash Flow The first question every serious buyer asks is simple: Will this business continue generating cash flow after the owner leaves? Businesses with recurring customers, consistent profitability, stable margins, reliable financial reporting, and strong cash flow command significantly higher valuations because they reduce uncertainty. The more predictable your financial performance, the more valuable your company becomes.

Buyers Want a Business—Not a Job One of the biggest reasons businesses receive lower offers is owner dependence. If every important decision requires you… If customers only trust you… If employees rely on you… If sales stop when you stop… Then buyers aren’t purchasing a business. They’re purchasing your job. The more independent your company becomes, the more attractive it becomes to buyers.

Strong Financial Records Build Trust Professional buyers expect financial statements they can rely on. They look for:

  • Accurate financial statements
  •  Clean tax returns
  •  Monthly reporting
  •  Normalized earnings
  • Organized documentation

Disorganized books create doubt, and doubt always lowers value. Great Leadership Creates Premium Value Businesses with strong leadership teams consistently receive higher purchase offers.  Why? Because buyers know the company can continue operating successfully without the owner being involved in every decision. Companies with defined responsibilities, accountability, low employee turnover, and future leaders already in place are viewed as lower-risk investments.  

Systems Are More Valuable Than Heroics Many successful businesses rely on talented people. Exceptional businesses rely on systems. Documented procedures, operating manuals, training programs, technology, and standardized processes allow a company to produce consistent results regardless of who is running the day-to-day operations. People eventually leave.  Systems remain.

Diversification Reduces Risk Imagine one customer accounts for 40% of your revenue. A buyer immediately sees risk. The same concern exists if your company depends on one salesperson, one supplier, or one product. Diversifying your customer base and revenue sources creates stability—and stability increases business value.

Buyers Purchase Future Growth Buyers aren’t just investing in today’s profits. They’re investing in tomorrow’s opportunities. They want to know:

  •  Can revenue increase?
  •  Can margins improve?
  •  Are new products possible?
  • Can technology improve efficiency?
  • Can the business expand into new markets?

Often, future growth potential is worth more than current earnings.

Eliminate Deal Killers Before Buyers Find Them Unexpected problems can quickly reduce purchase price—or stop a transaction entirely.

  • Common deal killers include:
  • Pending legal issues
  •  Poor contracts
  •  Tax problems
  •  Environmental concerns
  •  Employee disputes

The fewer surprises buyers uncover during due diligence, the smoother and more profitable the transaction becomes.

The Most Valuable Businesses Are Transferable Ultimately, buyers ask one question: **”Can I step into this business and continue operating successfully?”** If the answer is yes, buyers compete. If the answer is no, they negotiate. Transferability is one of the greatest drivers of business value. ## The Best Time to Prepare Is Years Before You Sell Increasing the value of your business isn’t something you accomplish six months before retirement. The most successful exits are planned years in advance.

Owners who prepare early enjoy:

  • Higher business valuations
  •  More negotiating leverage
  •  Greater financial security
  •  More retirement options
  •  Less stress during the sale process

How the GWT System Helps Business Owners Increase Business Value The GWT System was designed to help business owners move beyond simply operating their company to building a business that creates long-term wealth. By focusing on enterprise value, executive compensation strategies, retirement planning, succession planning, and owner independence, business owners can strengthen both their company and their personal financial future. The goal isn’t simply selling your business.  The goal is creating financial freedom.

Ready to Find Out How Valuable Your Business Really Is? If you’d like to learn how prepared your business is for a future sale—or discover the areas that could significantly increase its value—schedule a confidential conversation today. Thomas J. Perrone, CLU, CIC, New England Consulting Group of Guilford, Inc. **Building and Protecting Your Business Worth**,Helping business owners build wealth, increase enterprise value, and retire with confidence.

VIEWPOINT: To plan for the future you need to know where you are currently in your planning, This short 4 minute survey is enough information for us to complete and send you a report called the “Where You Are Report”.  This will help you plan for your future.   To take the survey CLICK HERE

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