Succession Planning Strategies for Small Businesses and Entrepreneurs

If you own and lead a business, there's a very important question you need to ask yourself: Do You Have a Succession Plan in Place?   

The statistics are surprisingly low when it comes to the number of business-owners who currently have a written succession plan in place.  Numerous studies in recent years consistently show less than half of Canadian business owners do.

Ready to Pass the Baton?

Having a plan - in writing - is essential for the well-being of both your business, and yourself.  A well thought-out strategy must be in place for what will happen to the business when you leave it, whether that is through retirement, illness, or untimely death. Keep in mind that a will is not the same thing as a succession plan.  A proper Succession Plan can help facilitate the right transition to keep your business running successfully, but also do so in a way that maximizes the financial opportunities and tax benefits to you and your successor(s).  Allow us to illuminate some of the key questions and considerations:

1. Have you identified the right person (or people) to take over for you in key leadership positions?  If you don't have someone internal you can pass the reigns to - especially on short notice - it's time to get moving.  It takes time to develop and prepare someone for such an important position, so the sooner you start preparing them, the better.  If the person you have in mind is external, and therefore unfamiliar with daily operations and personnel, it will take even longer.  There's no time like the present to get prepared.  Be sure you are actively developing this person to take over successfully and keep things running strongly.

Are You Prepared to Choose?

2. Does your Successor know your intentions?  Do other potential candidates know as well?  In cases of family businesses, there may be assumptions happening behind the scenes that you haven't considered.  If you have a child working with you in the business, that child may assume they will take over when you leave.  Of course, that may not be the best option if they do not presently possess the skill set necessary to do so.  If you have more than one child working with you, there may be issues of jealousy or anger that could come into play if one child is chosen over another.  Those emotions could have a negative effect on the business.  A plan that is known ahead of time - to all relevant parties - can significantly help avoid problems and frustrations later on.  You also need to consider that who is going to own the company is not necessarily the same thing as who is going to run the company.  If you want to leave the business to your children - even if they won't be running it - there are many tax implications that you will want to evaluate.  Succession plan strategies for family businesses involve many factors you'll need to consider wisely.

3. Are you planning to Sell your Business?  If you are considering this approach, you need to be aware of all the tax implications, as well as setting the company up to be sold for its maximum value.  That means having the company in a strong position with its customers and partners, and ensuring that position can be clearly communicated and documented for prospective buyers.  Knowing the future possibilities for your business, and how social and economic conditions could affect them, should also have you thinking about the best time to sell.  You have to consider that the best time to sell may not align with your ideal retirement date, so having a flexible plan is key. You should also have a buy-sell agreement in place that is in order and funded to reduce risk and minimize loss.  

4. Does the Succession Plan for your Business and your Personal Financial Plan align?  As the business owner, are you helping save for your retirement by paying yourself RRSPs and enjoying the lower tax rate of doing so, or are you assuming that all your retirement needs will be met when you sell the business?  Are you funding an IPP (Individual Pension Plan) that could be written off as a business expense?  You may also want to look into implementing an Estate Freeze.  There may be far more tax-effective strategies than what you are currently doing, and there's no better time than right now to put them in place.

Having a financial planner who is well-versed in Succession Planning is paramount to creating a plan that helps the business continue smoothly and successfully, and helps you retire with maximum financial benefit.

If you are ready to get your plan on paper, give us a call.  Continuum II Inc. is in the unique position of having a team of seasoned financial professionals - who also have a wealth of experience with succession planning - to guide you effortlessly through this challenging process and set your mind at ease.

Group Benefits for Small Businesses: How Do I Choose?

Did you know that offering competitive Employee Benefits is a key factor to both attracting and retaining top talent for your business?  And that retaining talent is crucial to improving your bottom line performance?

Canada's Top 100 Employers - a trusted survey that you've likely seen published in The Globe and Mail (and now in its 14th year) - ranks the excellence and desirability of Employers in Canada based on key factors that include "Health, Financial & Family Benefits" as a significant part of that rating.  How can you attract top talent vs. your competitors without this important factor?  The simple answer is: you won't.

A report by The Wall Street Journal on Employee Retention also confirms that "providing health insurance, life insurance and a retirement-savings plan is essential in retaining employees."  

When you don't retain good employees, you incur the costs of recruitment and retraining, which can add up fast and negatively impact your bottom line - not to mention the cost of the lost productivity happening at that temporarily empty desk.

It also goes without saying that when employees have access to great benefits and aren't worried about out-of-pocket costs, it helps to keep them healthy.  That means less sick time and more productivity from your team!

Forbes magazine asserts that Health Benefits is one of the Top 5 Reasons Employees Will Quit Their Jobs in 2013 along with stability, compensation, respect, and work-life balance.

It's simple.  You absolutely must provide an attractive health and benefits plan for your employees if you want the best - and you want to keep them.  So it's time to look at your business and think about how competitive and comprehensive you are in terms of perks like medical benefits, dental benefits, and group RRSPs (GRSPs). 

One of the things we specialize in at Continuum II is helping employers select the best benefits plan for their company.  We know it's a fine balance between creating a competitive plan that employees find worthwhile, and doing the right thing for the balance sheet where final costs and your budget are concerned.  Our process looks at the big picture with you and helps you identify and articulate all the things that matter:

We'll help you understand what you need, and create the financial path to get there for both you and your employees.

If you're a small to medium sized business with 5 to 500 employees, and you value their talent, want to retain them, and want to be sure you're getting the best value for your budget, we can help.

Make employee benefits a key part of your recruitment and retention strategy, and you'll see great results from the level of talent you'll be able to attract and, more importantly, keep!

What Is An Insurance Broker + Finding the Right One for Your Business

If you are a business owner, you likely already know that one of the best ways to attract and retain great employees is by offering them group health and dental insurance as part of their compensation plan.

Once you've made the wise decision to provide this benefit to your employees, the next step in the process is finding the right plan.  One that aligns with your financial budget, as well as with the needs of your valued employees.  That's where an Insurance Broker becomes a vital business partner to you.

In Canada, you have two different methods for obtaining this type of group insurance.  While some people think you can get it directly from a particular insurance company via the web or by calling, this is not actually an option for companies and small businesses.

The two actual options are:

1. You can work with an agent who represents one particular insurer, and deal exclusively with the products and services offered by that insurer.  You need to keep in mind that this agent will be tied to one company's line of products and services, and not permitted to look at the full range of what's out there in the marketplace.  
2. You can work with an Insurance Broker.

The advantage of working with an Insurance Broker is that when you do this, you can choose products and services from a wide range of insurance companies, thereby providing you with more options to find what truly suits your needs.  Insurance Brokers deal with many insurance providers, so they are not forced to recommend just one provider's options.  You can see all of the available choices, and work together to build a comprehensive package that is tailored to your specific needs.  The Insurance Broker does not work for any of the insurance providers.  The Insurance Broker works for you.

Continuum II in Burlington, Ontario is just such an Insurance Broker.  We have years of experience in helping our clients build group benefit plans that help attract & retain great talent, and do so in a way that balances the financial considerations of both the company and employee's contributions.  We provide a consistent point of contact whenever you need advice or information, and we make a point of visiting all our clients - in person - at least once every quarter to make sure we answer any questions you didn't have time to call and ask!

Continuum II deals with all the main insurance providers: Sunlife, Great West Life, Manulife, Blue Cross, Encon, Greeshield and Empire.

Even if you already have an existing plan in place, we are experts at looking at your current plan and finding small changes that can be made to impact big savings on your premiums.  In fact, we can become your agent of record and you can keep the exact same insurance carrier and benefits as you have right now, but start taking advantage of all we have to offer.

Our main priority - something no other Insurance Broker does - is not only to find you the right plan, but to take the administrative workload of managing the plan off your desk.  We know you're running a business.  We know how valuable your time is.  Instead of having employees come to you or your busy Human Resources team member when they have questions about submitting a claim or understanding the details of the plan, they can simply call us.   Leave the 1-800 #s in the desk!  We handle all those questions and deal directly with your people.  They know us by name and get consistency in who they deal with.  That leaves you with the time you need to focus on building your business.

If you are searching for expert guidance in building the right employee group benefits plan - from medical to dental and beyond - please give us a call.  We'd be delighted to help you navigate this important process, and find exactly what you and your employees need.