At Aventine we work with businesses to protect, preserve and grow their assets by offering comprehensive “Business Financial Planning”.  As the goals and needs of an individual are unique, more so are the goals and needs of a business. Financial planning for a business involves a range of considerations which could include investment planning, risk management, employee benefits, asset structuring, tax strategies and succession planning.

Every year companies large and small plan and document their budgets, marketing and business plans to provide a clear and concise direction toward a desirable result. Companies progress from privately held entities to household names all through planning.  Lack of planning has caused corporations to fail and families to lose fortunes upon death, disability or divorce.  So, why do so many small businesses resist or simply discount the Power of Planning?  It usually comes down to two simple scenarios, you plan your future or you accept the unknown.

Depending on your type of business, regulatory restrictions may impact the structure of your business or dictate specific requirements regarding succession planning.  Medical and financial practices are deeply entrenched in regulatory and licensing requirements associated with ownership.  The planning needs of regulated businesses require added attention to ensure all regulatory restrictions are met and address these specific issues.  A manufacturing or service company may not have such stringent requirements, but planning is still key.  Planning ahead and knowing your options is what makes businesses succeed.

Some of the areas of business planning that we cover are:

Business Valuations – provide an in-depth analysis to determine the current value of your business.  It is important to have your business valued every two to three years to ensure your succession plan is appropriately updated and funded.

Succession Planning – allows for business continuation in the case of an owner’s death or disability.  Succession planning through a Buy/Sell Agreement can use a pre-determined business value for estate planning, identify new ownership, manage taxes and minimize the opportunity for unwanted ownership.  Implemented and funded appropriately, a buy-sell agreement can provide the funds to complete a buyout without jeopardizing a company’s cash flow.

Some Buy/Sell strategies include:

• Cross-Purchase Agreement – in a business where there is only two owners this is a simple option that addresses the needs of succession planning.  The way the policy is held is important to ensure premiums are paid and benefits are received with as little tax impact as possible.  When ownership increases to three or more, the need for additional life insurance policies could become more complex. 
• Redemption Agreements – provide for the corporation to buy back a shareholder’s stock.

Protecting and Retaining Key Executives – a key executive is an individual or owner that is essential to the success or operation of a company.  Additionally, attracting a key employee from another firm may require a compensation package with added benefits. Deferred compensation plans may fill such a need.  It is important to understand the monetary value of such an employee; replacement through death or disability could be detrimental to the company’s growth.

• Executive Bonus Plans – Using IRS guidelines, an employer pays the premium of a life insurance policy “not included in a formal compensation plan”. The premium can be paid through an employee bonus or directly to the policy. As the employee is the owner of the policy, they may accumulate cash and utilize using the cash value within the guidelines of the policy.  If structured appropriately, the premium may offer tax deductions (as compensation) to the company while the cash value of the policy grows tax-deferred.
• Non-Qualified Deferred Compensation – are not qualified under tax law, so there may not be an immediate tax deduction to your business.  Non-qualified plans are not governed under ERISA, so must be for a select group of management or highly compensated employees.  Such plans provide the means for companies to effectively provide executive benefits to highly compensated employees.

Risk Management – we provide an in-depth analysis to determine how insurance fits into your business strategies. The analysis includes, health care benefits, key employee insurance, buy-sell strategies and general business needs.

Employee Benefits – as a small business, your ability to provide benefits will allow you to reduce employee turnover while attracting and keeping high-quality employees.  Employee benefits may include retirement plans, health care benefits and incentive programs.  One of the most recognized employee benefits centers around retirement planning. The following will give you a brief overview of various qualified-retirement plans and how they may help meet you business and tax planning needs.  (For additional information on retirement plans, click here)