“Unlocking Your Business Wealth?

Featured by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, evaluations, Income from your business, Key People_Or Group, Selling Your Business, Strategies of growing business

By Thomas J. Perrone, CLU, CIC

A great business book has just come out. Its called “Unlocking Your Business Wealth”, written by Brian Kerrigan.

Brian is a specialist in business growth. He is extremely passionate about helping business owners build wealth in their business so they can become financially independent in the future and enjoy the lifestyle financial freedom brings.

Many business owners run their business with the focus on personal income, and the freedom of time. However, the business can also be a valuable financial asset worth much more than the salary being earned. Business wealth is an asset that can create financial independence for the business owner.

Many business owners also put too much wealth in their business and when they wish to use this equity find it difficult to get out, or extremely expensive to get out. In many cases, it can be lost due to the market and elements of the business environment.

In this book, Brian discusses the building of business wealth and the opportunities it creates. Each chapter is a steppingstone to create business wealth.

A great short read, and necessary if you are an entrepreneur.

Brian discusses parts of the book, how it will help you grow your business and help you to avoid the traps that you may experience in your business life.

To Contact Brian:

860) 303-8929‬ mobile

Email Brian: bkerrigan@taylorfoleylaw.com to schedule a complimentary consultation to discuss your results and lay the foundation for your future success. Remember, the first step is often the hardest, but it’s the only way to reach the top.

Enjoy our recent podcast with Brian about his wonderful book!

https://podcasts.apple.com/us/podcast/building-and-protecting-your-business-worth/id1539791693?i=1000626000478

To Order Brian’s Book

Enjoy Brian’s flip book.

https://publuu.com/flip-book/47240/465013/page/1

Now It’s Available for You!

Featured by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, Executive Benefits, Inside Sale, Key People_Or Group, Passive Ownership, Selling Your Business, Strategies of growing business

IN THE “John F. Kennedy Era”

Business Owners Created Substantial Wealth Using This Benefit!

Business owners are the most susceptible to it…

Don’t feel bad if this happens to you!

WE are susceptible to “not knowing” things WE need to know TO SECURE OUR business growth.

This is why WE need good business advisors.

However, sometimes by not knowing, you are too late to the party, and opportunities are missed.

THIS IS ONE THING YOU NEED TO KNOW!

It is called “The Corporate Equity Executive Plan”, (OR CEEP.) It is designed for highly paid business owners and executives. The plan has been around since the 60’s, and it was used by the “big guns “of the Fortune 500 type companies.

And You Don’t Want to Be Late TO THIS PARTY!

However, over the years, the plans have been redesigned for the smaller business owner, making it possible for you to take advantage of this substantial benefit plan.

Because this benefit has been used in large companies such as the S&P 500, many advisors are not aware of this “Hidden Gem of a Benefit.”

Leo had a successful business in wholesale. He gave his employees great benefits, treated them well, had a 401k, and great health benefits.

His problem was the 401k limited the amount of contribution he personally could make to the plan because of his high salary. This was a problem for Leo, because even though he made 401k contributions his percentage of final pay was much lower compared to final earnings.

Leo didn’t want to depend on selling his business for his retirement, as he had children and grandchildren who wanted to run it and Leo regarded his company as a legacy to his family.

Leo wanted his company to support his future security, however, the 401k limited this ability.

When we projected his retirement benefit percentage compared to his final pay, he was substantially lower than his lower paid employees. His employee group would retire with social security and their retirement benefit at about 65-80% of their final earnings. In Leo’s case, his percentage would be about 40% of his final earnings.

To make up the difference we introduced Leo to the CEEP plan. The plan allowed him to decide the number of deposits he wanted to make into the plan. Leo decided to put in $50,000 more a year until his retirement. This added amount, would increase his final income to around 80-90% of his final pay, adjusted for inflation and salary increases.

Because the business is funding his retirement plan, he has the benefit of having very efficient tax results. The plan allowed Leo to use the funds whenever needed, and all withdrawals were tax-free. Leo was the only participant in the plan, but he plans on adding a few family members to the plan in the future.

Considering all the withdrawals would be tax-free, unlike a qualified 401k plan, Leo was able to secure his financial security through the funding by his company! Because very little of the contribution is part of his total compensation, Leo saw a great opportunity for the company to pay for his retirement. They pay for his cars, country club, lunches, some vacations, why not his retirement?

This was a case where the CEEP allowed the highly paid owner to create wealth for themselves, but also on a tax-free basis, allowing more flexibility at retirement for him and his family.

“Create Your Own “Tax-Free Haven”

By using your company’s cash flow, you can create a tax-free retirement plan. Imagine, no taxes on your income when you retire!

Participations: You do not have to include anyone else in the plan.
Contributions: Contribute to the plan as much as you want with flexible contributions, including skipping ability.
Contribution allocation: All the contributions go to your account, and you are not forced to share contributions with anyone.
Usage of funds: You can withdraw these funds before 59 1/2 without taxes, penalty, or restriction-why not fund your inventory this way- without a banker!
Funded by your company: Like a 401k plan, your company contributes to the plan, to your account, since you are the only participant.
Deductible: The company can decide when they wish to take the deduction of the plan.
At Death: From day one there is a “self-completion clause”, if you die, a tax-free lump sum benefit is paid to your family. In most cases this is the amount of money you would have created in retirement had you lived to retirement.
No force out like RMD: At retirement you are not forced to take withdrawals from your plan, like the required minimum distribution rules under 401k’s and IRA’S.
No Tax on Inheritance: All benefits are tax-free to your family at your death.
more….

Do you remember When?

When you were a kid, did you ever lay down in freshly mowed green grass and stare up at the blue sky and watch the clouds move? You smelled the sweetness of the cut grass and just felt so relaxed? In the background, you hear a twin-engine airplane flying above. This is the moment in time when there were no issues in life, things were great and easy, and you were so relaxed…

Imagine that feeling, but now it’s at a time in life where you are ready to enjoy more time to “lay in the grass” again and feel that same feeling. Only now, you are retired, and because you made the right planning decisions, there are no issues. Financially, you are enjoying a wonderful retirement lifestyle. The reason: you eliminated income taxes! You are living the tax-free lifestyle which the CEEP plan offers.

That is what the CEEP can create for you, and I want to give you more information about it because it is

one of the best benefits ever for business owners.

This is one of those moments you don’t want to show up late for the party! If you haven’t been exposed to this type of executive benefit, do yourself a favor and download this Free White Paper that explains it all.

I encourage you to take a new path that will give you the opportunity to create greater financial wealth for your future. A path that will educate you on the great usage of business cash flow to create more financial security. The path you want to take is to request this free report, download it and spend some time learning about this fabulous benefit used by many high earning business owners and executives since the “John Fitzgerald Kennedy Era”.

To receive your FREE WHITE PAPER, SCAN THE QR CODE. COMPLETE the short form and your FREE WHITE PAPER WILL DOWNLOAD IMMEDIATELY…

Or CLICK OR TYPE IN

P.S. SPECIAL OFFER: The first 15 requests will receive a free copy of my book, “Unlocking Your Business DNA”. A BOOK filled with business strategies that will allow you to grow your business and create an ungodly amount of leisure time to enjoy what you are building.

https://bit.ly/3WjP0yw

You Don’t Need a Business Degree from Wharton to Build an Incredibly Successful Business,

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

But you do need this…

Dear Fellow Entrepreneur, who wishes to grow their business and enjoy what they are building…

did you ever wonder why some business owners run a successful business while others claw up a mountain to stay in business? It comes down to one STRATEGY, in my opinion.

A Recent Survey Reveals That 86% of Small Business Owners Risk Bankruptcy or A Forced Exit by Missing This Strategy!

Only 14% Of Business Owners Will Enjoy the Value of Their Business! i

You and I are entrepreneurs, wired with passion to run our businesses. I want to share with you a powerful strategy that will change how you run and grow your business. It will give you more clarity and create more simplicity in your life. This powerful strategy is one of the major contributing factors to building value in your business.

Have you ever noticed how some business owners keep more of the money they earn, work less, have unlimited family time, avoid getting drained by taxes, keep the best employees, and run their businesses, not the other way around?

My clients tell me the strategy has given them clarity and has simplified their lives allowing them to enjoy more of what life offers!

THE ISSUE and THE PROBLEM: The mindset when you start or buy a business is to bring your product or service to market quickly to create cash flow. This is the “action planning”, and it’s all about cash flow. The problem is you stay focused on the ACTION PLANNING MODE and neglect the DETAIL PLANNING MODE altogether, creating financial chaos, and diminishing the chances of accomplishing your dreams and aspirations!

Enter the Business Growth, Wealth, and Transition Plan (GWT PLAN) which focuses on the details of the Growth, Protection, Equity creation and Transition of your business. The GWT PLAN is a “Designed Plan” and creates the future financial success of your business. The GWT PLAN is like Kryptonite, fighting off bad mistakes, lost opportunities and keeping you on the path of building your business’ future wealth!

A TRUE STORY: In 1971 my father died suddenly at age 51. His very profitable business in Hamden, CT, was sold for pennies on the dollar. My mother went from middle class to poverty level overnight. She was forced to sell the family home and move to a few different neighborhoods, giving up what she loved the most, which was cooking for the neighborhood kids. This created great emotional turmoil in the family.

THIS DID NOT HAVE HAPPEN, BUT IT DID. Why? Because my father had a “Default Plan”, NOT a “Designed Plan”. He winged it, like so many business owners do. Because of that, he lost his “Life’s Effort”, and his legacy, at an extreme cost to his family.

If You Had a Financial Leak in Your Business That Was Going to Burst Your Financial Pipes, When Would You Want to Know About It?

YOUR SCENARIO WITHOUT A GWT PLAN

If you died or became disabled today, what will happen to your business? Without a plan, the banker would call your credit line, the vendors would stop selling to you, your key people would be looking for new jobs along with other employees. Your family would need to get permission from the probate court to run the business without breaking the law.

If your Key Person told you they were leaving along with five other employees, what would you do about this? The banker will call the loan, your vendors will cease to give you credit, you may lose other employees, and you would lose income very quickly!

What if you were in a squeeze economically, business was bad, costs were high, gross revenue is not covering expenses, what do you do? Call in Mr. Banker, and hope he has confidence in your business to solve the problem (remember Covid) and hope for credit!

You had enough; you want out. What’s the value of your business you want to sell? 86% of your fellow entrepreneurs are not going to sell their business, what would make you any different?

The Same Scenario HOWEVER, You Implement Your GWT Plan!

#1: Your banker doesn’t call your equity-line and they are satisfied with your continuation plan. Your family has planned instructions on how to run the business, while your employees are satisfied and confident of the continued success of your business.

#2. Your key people stay on because you have incentives for them to stay. Also, you have protection documents that would thwart their ability to compete with your business if they left.

#3. If you were so unlucky to hit a bad economic turndown, you have a special benefit in place to fund your cash flow without having to beg for money from the bank. This was created through your business cash flow in advance. It is substantial in value, and tax-effective, creating personal wealth outside of your business.

#4. You have been systematically formulating plans over the years for the purpose of transition someday. Because of that planning, purchasers are interested in buying your business at the highest potential value.

If You Are Investing Money, Time, Pride, Sweat and Nerves in Your “Biggest Effort in Life”

Why Would You Not Spend the Time to Protect It From the “What IF’S By Implementing Your GWT Plan!

It’s Not Your Fault However! It’s the Planning Professionals Fault!

Here is the difference between planners and what we do and why we make a difference…

It’s their agenda, not yours. –

The GWT PLAN agenda is designed by you. You pick the subjects you wish to plan for.

No respect for your brevity-take too long to plan.

The GWT Plan uses educational tools such as short videos, so you learn on your own time and verification of what you learn via conference calls.

They charge too much and complicate the planning making it more complex than necessary.

The GWT Plan charges are a fraction of the market charges for planning and is designed to be communicative and simple. We use a patented plan called, “The One Page Solution”, which describes the issue and the solution on one page, and this is done, one issue at a time.

They are averse to working with your other advisors.

The GWT plan encourages your other planning team to join us, so we have all the information about your dreams and aspirations and what your team has been doing for you. We welcome all professionals to engage in your best interests.

Many planners have never run a business or walked in your shoes.

We have been in business for over 50 years and have never been in any other business professionally, and know what it is all about having staff, payroll, working with banks and having an array of tasks to deal with.

They don’t spend time learning about your business and your value system, and don’t listen well.

The GWT plan doesn’t start planning until we feel we understand what your dreams and aspirations are. By using our tools, we not only learn about what the facts are, we learn about how you feel about what you are trying to accomplish.

Despite this…To Survive and Thrive in the Future Economy YOU NEED A GWT PLAN TO…

Create a path to follow for success with clarity and simplicity for your business and personal life to help you enjoy your life.

Create a business culture to help hire the right employees, develop middle management for your future transition, and free up more time for you.

Uncover opportunities in creating wealth in your business with tax efficiency through your cash flow while protecting and growing your financial future.

Develop a solid transition plan to maximize the value of your business for your future financial security while creating wealth outside your business!

Learn the secrets of developing your GWT Business Plan by requesting my FREE E-BOOK. I am offering a limited amount of copies for distribution over the next fee days! Take control of your future and go down the path the will give you CLARITY AND SIMPLICITY ALONG WITH GREAT SUCCESS!

REQUEST YOUR FREE COPY of my published book, “Unlocking Your Business DNA”, and learn the benefits of having a GWT PLAN! ORDER NOW- distributing a limited number of E-Books.

Click Here to get your Free DOWNLOAD E-BOOK

The Benefits Of Keeping Your Key Person And Key Group!

December 28, 2022 by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, evaluations, Executive Benefits, Income from your business, Inside Sale, Key People_Or Group, Life Insurance Types, Strategies of growing business, Tax Free Income

Recently, I wrote an article about the “Quintessential Employee” and covered all the benefits of having a key person in your company.

The Education of the Quintessential Employee!

Some of the attributes of the key person are:

Creates more business value by freeing owners to focus on other profitable tasks
Purchasers of a business want to have middle management in place
Builds reputation and culture
Key people tend to impress other employees as a good example

Key people, as described, are also likely future purchasers of the business, or
Likely to run the business while the owner enjoys life, but still has the control and wealth

For the full article, download The Benefits Of Keeping Your Key Person And Key Group

Enjoy the download of the full article. The link in the article will download immediately the option of receiving the report.

Download The Article

Estate Planning Chaos for the Business Owners

November 25, 2022 by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, Executive Benefits, Income from your business, Inside Sale, Key People_Or Group, Life Insurance Types, retirement, Selling Your Business, Strategies of growing business, Tax Efficient

Why do some Business Owners have higher costs than others when…

– They settle their estates…

– They retire…

– They transfer their business….

Let’s call the above items, “triggers”

Over the years I have had the experience of seeing the end results of the estate settlement process for many business owners. In many cases the results were not pretty because of the excess settlement costs. From my own experiences and case studies with associates, I have come to the realization that some business owners have higher estate transfer costs than other business owners. The interesting thing is the excess costs can be controlled by the estate owner.

Business owners usually have more value in their estates because of business values and settling the estate can be usually more complex. But as mentioned, in my opinion, there are controllable aspects of the costs and ways to mitigate these costs.

Estate transfers Cost: Three major reasons for higher costs!

No planning: This includes not having any plan, or not updating any earlier planning. Their estates are complex, and they need more than surface planning when their situation calls for more complex planning to carry out their goals. This takes more time and money. Without it they pay a price in estate settlement because they designed the wrong plan or have no plan at all.

No time: In many cases, there isn’t any time to make changes. It is too late! All the changes should have been made in advance. Therefore, working on their business and estates yearly is a major benefit as opposed to waiting until it’s “too late”.

Owners don’t spend enough time asking the “what if’s” of their situations. Every year many changes come out of Washington that affect business and estate planning. Being unaware of these changes makes them vulnerable to excessive estate settlement costs . In many cases the business owner loses by default.

No liquidity: Settling the estate takes money. In many cases, most of the wealth is in the business and other personal hard assets which are difficult to turn into cash within a o brief period.

§ Even if they could be liquidated, they either run the risk of losing value, or causing major tax issues . Consequently, the estate is open until the taxes are paid and dissolution of assets is completed, causing major costs. Wealth gets stuck in business and its value is at the mercy of the market and other economic factors.

§ To prevent the lack of liquidity, we suggest that business owners use the business cash flow to create executive compensation plans with tax-free death benefits, and tax-free withdrawals. By doing this they create liquidity. When an estate owner dies, there is a guarantee that a tax-free death benefit will create the liquidity needed. Funded by the company cash flow .

Succession of the Business

No planning within the business for successor management. No building of a key group or key person to learn the business as an owner. Consequently , when the time for transition is near, there aren’t many options. This affects the “most potential value” of the business. The time to start planning transition of the business is when you start your business or buy a business! The key group is also the group that starts to define the culture of the business, making it easier to attract talented employees.

No systematizing of the business- the owner has not taken the time to prepare systems. Everything is in their heads, literally. There are no written down notes, no manuals or guides to pass on the instructions to others. “In simpler terms, the boss must be around for things to get done.” This limits the future ability to sell the business. Purchasers are looking to buy a business that has growth potential. Nor do purchasers in most cases want to invest in a company that has to restructure its operations. A purchaser is not likely to invest in a company where systems are not in place, and which are not transferable.

No development of “value drivers” to create growth and culture. Consequently, there is no culture, systems, and no middle management to take on responsibilities or a group to transfer the business to as mentioned above. This is a major issue with companies. A true test is asking the business owner if they can take 30 or more days off a year. If not, I tell them they have a job, but not a business. The owner of the business has not let go of the control they have of the business. It’s the business that controls the owner.

Retirement Planning and Why the Wrong Type Causes Chaos!

The wrong type of retirement plan- although qualified plans like 401k’s or profit-sharing plans are good for rank and file. They are not always the best retirement vehicle for high income business owners for a few reasons. Qualified plans are riddled with rules that business owners don’t need in their life. Qualified plans are needed in the company to attract employees, so in many cases, they are a particularly good method of attracting employees. However, for the business owner, Executive Compensation plans are more useful. Here are why qualified plans can be a thorn in the side of the high earning business owner:

No discretion as to who gets what amount in the plan-meaning the owner doesn’t get 100% of the distributed amount.
Who is to be in the plan- The owner can’t discriminate as to who should take part in the plan
No use of money 59 1/2 without penalty- Business owners are always looking for cash to support their businesses. The inability to withdraw funds from their retirement account is problematic when funds are needed
Age 72 RMD forcing high income owners to pay more taxes- business owners usually have other assets to rely on for income. It could be passive income from rents, income from the business and income from investments.
IRS in your life – Qualified plans need to file with IRS. However, if business owners used executive compensation plans, this is something they could avoid.

Many business owners can use executive compensation programs to develop wealth outside of their businesses and get great tax efficiency. For example, using a “Corporate Equity Executive Plan” will allow the owner of a company to use the company cash flow, pay 10% of the tax they would pay under a pension plan, and create a tax-free family bank. The family bank allows the owner to use the money, tax-free, any way they wish. Also, they are not forced to take the money out when they are retired.

For more information about business planning, I am offering YOU A FREE copy of my eBook, “Unlocking Your Business DNA” FREE Business guide which will help you understand some of the planning concepts used in retirement planning, business succession and estate planning. CLICK HERE for your free download. Your book will be downloaded automatically.

If any problems with your download please email me; tperrone@necgginc.com

The Easy Process To Identify and To Solve The Problems!

Featured by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Income from your business, Inside Sale, Key People_Or Group, Passive Ownership, Selling Your Business, Strategies of growing business, Tax Efficient, Team, Valuation, Working On Your Business

The Easy Process To Identify and To Solve The Problems!

Excerpts from My book, “Unlocking Your Business DNA”

The One Page Solution!

As we start the process of fixing the problems, they need to be identified. In chapter 1, I discussed how the business owner needs to find their “Business DNA”. Again, this is about focus and asking the right questions, and giving the business owners the amount of time, they need to think it through.

I break down the issues into two categories, BUSINESS GROWTH AND TRANSITION.

Business Growth: Focuses on the business itself such as the strategies needed to grow the business, the systems, the culture, and its employees. It is all about the business future.

Transition: Focuses on the categories that relate to the owners, and the changes they need to make in their personal life because the business is growing.

I keep these categories separate because the issues concerning the business growth are different than the owners transition issues. However, as the business growth changes, it affects the transition of the owners, and vice versa.

It is very important that the business owner is committed to fixing their problems. If they are not, the first time they have a business roadblock, they will tend to put planning on the back burner. This is a mistake, because most of the time it does not resurface until there is a crisis.

However, in our planning we do create action plans in small steps. Having a team of advisors working together creates the ability to complete the small steps needed to accomplish our goals.

An Example:

A perfect example was when a company we were working with had plateaued in growth and wanted to create more business growth. When we went through some of the planning questions, I realized the owner had spent no time systemizing their business.

The owner had no documentation of operational systems of his business, but instead it was all in his head. He would delegate the tasks to his employees like a drill sergeant. He never even thought of the fact that there was no continuity in his business, consequently, if something happened to him, the business would have ended.

I asked him, “could you go on vacation for three months and not check in during that time”?

He looked at me and laughed, replying, “are you kidding this place would fold in seven days.”

I replied, at least you are real, the sad part however is you do not have a business, you have a job. You have a position, a paycheck, and a place to go, but you do not have a business.

He looked at me dazed! But he knew I was right.

The Process Using “One Page Solutions”, will keep everyone on track.

To uncover the issues and problems with the business owner we go over the main subjects called “ONE PAGE SOLUTIONS.” On any subject there are always a few directions in which the business owner can go. We discuss them and analyze what are the most important subjects the business owner needs to deal with currently. “THE ONE PAGE SOLUTIONS” ARE LISTED BELOW.

Each Subject has a few sub-topics we review with the owners. As we DISCUSS the One Page Solutions, we find the strategies which will solve the issues. Once we are done with the subject, we move on to the next One Page Solution, if any.

THE FOCUS AREAS of the “One Page Solution” ARE:

1-Sale of Business (outside)/ Evaluation Methods/Timing

2- Inside Transition (Family, Co-Owners, or Key Employee/s)

3-Passive Ownership- Owner wants to still run the business, but take long trips

4-Retirement; defining and preparing

5-Wealth Accumulation & Asset Protection (both in and out of the business)

6-Premature Death- Consequences

7- Estate Distribution- updating

8- Life Insurance Contracts and Benefits

9-Legacy Planning / Management of Legacy

10-Disability and Illness, Medicare, and Medicaid

11-Key Employee Retention- and Creating A Culture

12-Key Employee Owner’s Manual- systematically creating company manual, business coaching, marketing proceedures

13-Corporate Benefits and Retirement- cost and efficiency

14-Qualified Plans and Personal Liabilities- Executive Compensation

15-Family Relationships/Employee Relationships/Human Resource

We helped a business owner recently with the problem of not having business growth over a prolonged period of time. The solution was to put in place strategies that would create transferable values for the future.

They included things like creating key group, documentation, standard procedure, diversification, and growth strategies.

In this case we realized this will take some time to implement. The owner was under no delusion that this will be done in one year. Most importantly the owner started the process. A few years from now he will see the outcomes in all its glory. Because we have experts in our toolbox, we shared our professional advisors with our client for coaching purposes, and education.

Besides implementing a few systems, they will also do a business appraisal every two years. Over a period, this will help them evaluate the growth of their company by implementing the systems suggested.

By doing this the company could allow for better planning in the future, and adjust the path towards financial security, and business growth.

One of the key elements to helping Business owners solve problems is to also identify the roadblocks. This eliminates the surprise factor should our implementation strategy not go as planned. In one of our planning agendas, we discuss these roadblocks and try to define the subsequent issues and challenges in the future.

What is extremely important in this process is that it makes the owner aware of any potential issues they must have to deal with in the future and stay ahead of the problem curve.

Over the years what has been extremely helpful has been the communication with the team. Again, these are the client’s advisors that may or may not have been in place before we started planning. Since we update the team regularly, we are often given new advice that has been helpful in forecasting future events in the business.

We normally would not have this knowledge if we did not have the team of advisors in communication. This is one of the biggest advantages of working with the team and having periodic reviews.

We have been successful helping business owners work on their business to get issues resolved and to focus on details. We use a One-Hour a month system for the business owner to do this. This allows the business owner the brevity they want, but also, gives them quality time to organize the details of their business. Through our step-by-step system, we help business owner cover all the key issues that are needed to cover to run your business smoothly, take more time off, earn more money and just enjoy working and life much better.

If you would like a FREE WHITE PAPER called “Your Business Essential” which will help you organize your business, CLICK THE LINK BELOW, download the white paper. This is a 128-page guide in business planning Your Free. When you click submit on the form, your file will immediately download. Enjoy.

Immediate Download

You can purchase of “Unlocking Your Business DNA”, AT Amazon. All profits to to Wounded Warrior Foundation and other Veteran groups.

Pension Maximization Using Life Insurance To Provide The Guaranteed Capital!

October 6, 2021 by YOUR BUSINESS WORTH, posted in Executive Benefits, Income from your business, Key People_Or Group, Life Insurance Types, Tax Efficient, Tax Free Income

For people who are in pension plans, (yes there are some in the private section, but mostly in the government sectors), they face a decision at retirement of how to take the retirement income distribution.

Basically, they have two options. They can take a lifetime income, which is the highest income the annuitant can receive over their lifetimes. Or, they can take some variation of a survivorship benefit for their spouse. The 50% joint payout is the normal payout, however, some plans will allow 75% and 100%. The higher the percentage spousal benefit, the lower the annuitant payout.

Example:

This example uses the joint and survivor 50% payout.

Let us assume if the annuitant takes the single life payout, the payout would be $2,100 per month. If the annuitant took the survivorship options, the payout would be $1,600. There is a $500 difference per month. Should the spouse die first, usually, the surviving annuitant is stuck with the $1,600 for their life.

On the other hand, if the annuitant took the life income of $2,100 and dies first, the spouse receives nothing.

Options:

A great guarantee options, is to purchase a life insurance plan in the amount which will represent the present value of the survivorship value would be.

By purchasing a $285,000 life insurance policy, using an assumption of 3% earnings on the investment, the payout would be guaranteed for 20 years. If the annuitant wanted the $1,600 a month for a 25 year period, the present value is $334,332.

Scenario:

If the annuitant dies first, the pension would end, however, the life insurance would be paid tax free. The surviving spouse could invested the proceeds and take withdrawals from the account equal to what the spouse would have received under the joint and survivor pension payout. The spouse could take more or less, as needed.

If the spouse predeceased the annuitant the life insurance can be cashed out, or continue to stay in force to create a legacy for the family. The policy also can also be used to supplement a retirement income for the annuitant using the cash value.

Unlike the pensions joint and survivor option, the Pension Maximization Plan offers much more flexibility in the planning. It also allows for maximum payout should the annuitant live a long life while providing security for the spouse.

“Special Free Report”; If you are interested in a tax-free retirement sponsored by your company, get this special report called; Wealth Without Taxes. This is a plan designed for business owners and key executives, not the rank and file. Besides tax free benefits, the program offers business owners the ability to shift business income to their personal ledger with minimum tax exposure. To get this report, CLICK FOR YOUR REPORT Once you fill out your email information, you will receive the report. Thank you.

https://youtu.be/DF-GwmDD6kQ

Click to view a 4 minute video.

The Six Most Costly Financial Mistakes Business Owners Make Costing Them to Owe Huge Taxes!

Featured by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, Executive Benefits, Income from your business, Key People_Or Group, Life Insurance Types, Passive Ownership, Strategies of growing business, Tax Efficient, Tax Free Income

Many business owners are unaware of the opportunities they have in creating wealth through their business. Many owners put too much wealth in their business, where it can be tied up or hard to get out. It also prevents them from accumulating outside retirement funds.

There are several ways to create wealth through your business on a tax-efficient basis which many owners are not aware of.

I would like to share with you the six mistakes that prevent owners from creating more wealth by utilizing the business cash flow.

NOT IMPLEMENTING A CEEP: (Corporate Executive Equity Plan) for themselves. This is one of the most tax effective methods of creating personal wealth using corporate cash flow. The cost of providing this wealth creating account costs the owner about 30% of the tax cost. Example: if the company bonused $20,000 to the owner for a personal retirement plan, the tax cost would be $6,000 each year. However, under a CEEP arrangement, the cost would only be a $60 the first year, and about $1,200 the 20^th year. This is one of the most misunderstood concepts in executive compensation by attorneys, insurance professionals and CPA’S. Consequently, it might be considered under used. However, the executive compensation specialist understands how the plans work and how it can be of great value for the business owner in shifting income from the company to the personal side of the owner.
NOT TAKING ADVANTAGE OF THE SECTION 412(e)(1): which allows the owner to make a substantial number of tax-deductible contributions into a retirement plan skewed towards the higher paid owner. Example, the owner aged 50 can deposit up to $213,905 fully tax-deductible. Great for good cash flow companies.
NOT USING THE “SAFE HARBOR RETIREMENT PLAN”: where a substantial amount of the tax-deductible contributions can be allocated to the higher paid participants. Also, included in this arrangement is the “Cash Balance Plan”. These plans create greater tax-deductions for higher paid employees.
NOT TAKING ADVANTAGE OF A RESTRICTED BENEFIT PLANS (RBP): which is a discriminatory and tax-deductible plan. It can be used to provide valuable benefits to retain key people. The business owner keeps the forfeitures if the employee leaves before vested. This can lock your key group to your company.
NOT CREATING A DEFERRED COMPENSATION PLAN: This is a flexible, separate, and discretionary retirement benefit that can also become a mechanism for funding the sale of your business in the future and create retirement income. The pot is sweetened when you add a DBO (Death Benefit Only) to the planning.
NOT CREATING AND NOT FUNDING YOUR BUY AND SELL AGREEMENTS: A disability, long term illness, or death may occur long before the owner planned to exit their business, creating a path to financial disaster not only for the owner, but their family, partners, and employees. This is one of the most egregious mistakes I see business owners make. Many times, it goes unnoticed by the advisors. This is one of the reasons why I am an advocate of check-off lists, “fire drills”, and annual reviews.^[i]

Simply Put! By Utilizing These Common Benefits, Owners Can Maximize Their Fullest Potential Business Value!

To help you understand some of the ways to utilize your business cash flow to create more wealth for you and your family, I put together this FREE WHITE PAPER, CALLED “A TAX -FREE LIFESTYLE FOR BUSINESS OWNERS”, AND I would like to GIVE this FREE WHITE PAPER TO YOU.

THIS REPORT will help you understand how you can use your business to take advantage of discriminatory benefits plans for yourself, family members, and key employees. The Tax-Free Lifestyle REPORT is strictly for small business owners who want to grow their business while creating more wealth outside of their business. I designed this white paper to help business owners avoid the COMMON MISTAKES made by other business owners which forced them to work more years, save less retirement, pay more in taxes, and tied up too much wealth in their business, creating more stress, and had no free time for themselves!

You’ll also discover in the TAX-FREE REPORT:

One simple concept allowing you to retire with more wealth or retire years sooner. (This one simple financial principle is rarely ever talked about on “pop news” financial TV shows or by other so-called “financial planners”.
2 proven strategies to increase cash flow and reduce expenses if you really want to sleep at night!
3 secret ways to have your business build a tax-free wealth account for your personal and business use!
“Your Business DNA” Understanding this key allows you to double your savings and retirement investing without making a single dollar more in income or investing in more capital equipment and labor.
5 value drivers to prepare your business for a sale, even 20 years in advance!
How a simple inexpensive benefit plan can keep your key people!
How creating a Deferred Compensation plan can help finance the future sale of your business.
How having a benefit plan for you in the future can lower your cost to sell your business?
Misleading and incorrect “old wives’ tales” about creating wealth in your business.
Tax saving strategies that 9 out of 10 business owners don’t use and end up paying more taxes
Much more…

TO RECEIVE YOUR FREE NO OBLIGATION WHITE PAPER Called:

“The Tax-Free Lifestyle for Business Owners”

To request your free white paper

CLICK SUBMIT: Wealth Without Taxes Report

Once you submit your email address, you will receive your report immediately! Enjoy!

Now you may be asking…Why would I spend my own money to send you this FREE WHITE PAPER? Think of it as my personal introduction… a way for you to get to know me better. Nothing more than that!

Often enough, when business owners learn the information in this guide, they decide they want to know more about what we do, and possibly do business with us so they can have our business owner expertise and in-depth knowledge of how business owners think. I know, I am one of them. I know what you think because I think about it all the time. Let’s say 24/7 to be safe! Just as you value the expertise in your business field, I believe working with a financial expert who knows what it is to run a business and knows the business world is critical to your financial health.

That’s it! Let me send you “The Tax-Free Lifestyle for Business Owners”. Do with it what you want. Maybe you’ll want to talk to us further, maybe you won’t. There is no obligation to do so.

Either way, I think you’ll find the information in this report will be immensely valuable to helping deal with the “what if’s, grow your business value, enjoy it more, and create more time for you and your family while creating an almost “stress-free” life with tremendous financial freedom in the future. Oh yes! NO TAXES EITHER! Visit www.yourbusinessworth.com to learn more!

FOR A 7 MINUTE VIDEO

^[i] Paul Hood: “Buy and Sell Agreements- the last will and testament for business owners”. Paul discusses his check off list, and his “fire drill”. I am an advocate for these systems to make sure the buy and sell agreement is a perfect of a fit to the entity and owners as possible.

Issues Of A Growing Company

Featured by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Estate Planning, evaluations, Funding your Buy and Sell, Key People_Or Group, Life Insurance Types, Selling Your Business, Strategies of growing business, Valuation, Working On Your Business

This is a case study about a company that did not have a buy and sell agreement in place. The business has grown substantially. The owners were concerned about the growth of the company, sacrificing larger salaries to invest and grow their business.

The accountant recognized that there was a problem if there was a termination of a partner, and referred me to his clients to help educate them on estate and business planning, and also to help them design a buy and sell agreement.

Scenario:

Bill and Sam started a very successful manufacturing company. They produced the assemblies for hard drives.

They are a C corporation and have scaled tahe business from four full time workers to about 34 employees. Their client base has grown from just a few to a few dozen over the years.

One Page Issue(s) (With our team we identified these issues)

The business has never been appraised so there is a question of the value of the company and estate.
Both partners have families and larger personal liabilities than when they started.
They have invested their earnings into the business and don’t have a retirement plan.
They don’t have a binding buy and sell agreement, nor a method of funding the liability.
The owners are expecting the exemption credit to lower which will expose them to death taxes.
Neither partner has done any estate planning, other than simple wills.
Retaining the key person in the firm who has the relationship with the customers, vendors and key contacts. Because he basically runs the company, the owners take a lot of time off. They are concerned that the competition may try to recruit him. If lost, it would have a major impact on the company.

Major issues and immediate concerns:

Potential fire sale of the firm if there is not a “planned design for buyout”
Uncertainty and instability for the employees, especially the key people in the firm.
The possibility of the deceased partners family running the business with the surviving partner, leading to inexperienced leadership.
Lack of liquity to pay the taxes assessed on the value of the business and other administration costs. Without the valuation, it was a best guess estimate, jeopardizing accurate estate planning.
Business valuation disagreements, especially IRS litigation.
Lack of market for the business.
The loss of income for the family.
Lending from the banks could be cut off after the death of one of the owners. No assurances that loans would be immediately available upon an owners termination. A concern that any new loans in the future may have convenants that credit lines would be redeemed upon a partners termination unless there was a valid buy and sell agreement.
Stress on the business’ cash flow or credit line as a result of the surviving owner trying to purchase the deceased partner’s share.
The possibility of losing their key person to a competitor would be a significant loss to the firm.

One Page Solution

The most critical issues to solve now :

Complete a Buy and Sell Agreement with funding/ both life insurance and disability insurance
A Certified appraisal to be done
Create strategies to keep the key person with the company
Start the process of personal estate planning for each partner

There were other issues, but we all felt the buy and sell agreement was the most important at this point.

One Page Solutions For Buy and Sell Agreement:

Cross purchase buy and sell agreement funded with cross owned permanent life insurance
The insureds were about the same age
They were both in great health
Premiums were about equal in cost, and the corporation would bonus the premium to the owners
Since the owners willl sell in the future, having the increased stepped up in basis would save taxes, as the partners plan on selling in the future.
Also wanted the insurance company to define full disability through the contract definition.

One Page Solution FOR KEY PERSON:

A CEEP for the key person (Corporate Executive Equity Plan); For Key Person

Cash Equity for retirement
Tax free death benefit for family
Limited contribution by employee-basically paid in full by employer
Tax-free income at retirement- Will create about $200,000 tax free for 20 years at 66

There was a vesting schedule designed for the employee for 10 years. If he stayed he would have a much richer benefit than his 401k would provide

Non-compete, Non-recruiting and solicitation of employees of the firm, and Non-disclosure agreement to be executed by key person

Estate Planning:

Currently, working with the attorney on new wills, trusts, and an irrevocable trust for life insurance. There are some other things we are considering with real estate owned outside the state, such as LLC, AND inter vious trusts.

Triggers: In the agreement we established the major triggers: death, disability, termination, retirement, divorce, bankruptcy. We decided to use a disability income policy to fund that part of the plan. We also wanted to have the definition of disability decided by the insurance company.

As we move forward we are reviewing other issues yearly. Also, forming the team with the attorney, CPA, and others was instrumental in accomplishing the results.

Receive your Free Business Kit Guide. A Great guide to help you understand some of the business planning issues. CLICK HERE

10 Questions Every Business Owner Should Know Know!

April 22, 2021April 22, 2021 by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Company Wealth, Estate Planning, Executive Benefits, Key People_Or Group, Life Insurance Types, Passive Ownership, Selling Your Business

What strategies are you using to make sure you will grow your business to the maximum value it can grow to.

What are you doing to make sure you have a key group, culture, and a method to keep them with you for the future?

What makes you think you are taking advantage of all the benefits available to use in your company that would help, you, your company, and your family on a tax-effective basis.

How will you extract the greatest potential value of your business upon your death, disability, or retirement (the three major reasons you will have to leave your business)?

What ideas and strategies have your accountants and attorneys given you in the last three years that has made a significant difference in your growth of the business?

If you died tonight, who would own your business? And are you sure that is true?

Make makes you sure that your key people will not leave you? And if they do, what makes you think that they will not go to your competitor, start their own business, and/or reveal your business secrets the competition.

What makes you believe your key people would not steal your employees, and clients, if they decided to set up shop across the street from you?

When was the last time “all your advisors” sat in the same room for the morning and talked about your goals, and what is the best advice they could give you to create more growth and better business?

How would your spouse know what all the passwords needed to open your computer accounts, would she know where the key to the front door of your office is, if you died last night?

For A Free Business Kit click the link below:

https://www.allclients.com/Form2.aspx?Key=49D7A9612BCD8971E08D1B3293625EBA

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