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Protecting your Business: Key Strategies for Safeguarding Your Future as a Business Owner

Updated: Dec 7, 2023

As a business owner, your business represents not only your livelihood, but the culmination of your hard work, passion and vision. Unforeseen circumstances can pose significant risk to your business’s continuity and financial stability. To safeguard your business from these risks, it is crucial to implement essential risk management strategies. Here we will explore three key strategies.

1. Buy Sell Agreements: Ensuring a smooth business succession

A buy-sell agreement is a legally binding contract between co-owners of the business that outlines the conditions under which an owner’s share can be sold or transferred. This agreement plays a vital role in ensuring a smooth transition in the event of a death, disability or retirement of a partner or shareholder.

An example of the risk of not having a buy-sell agreement is if there is a sudden departure of an owner. It could lead to chaos, the potential for disputes and even dissolution of the business. Consider a scenario where Sarah and Mark co-own a successful business. Tragically, Mark passes away unexpectedly and his family inherits his share of the business causing friction with Sarah, who now has to work with Mark’s spouse, who knows little about the industry. This situation affects the day to day operations, but also creates significant uncertainty about the future of the business.

The solution is to have a well crafted buy-sell agreement that addresses these concerns. It establishes predetermined terms and a valuation method that will be used for the business, enabling the remaining owner(s) to purchase the deceased or retired owner’s share promptly. In the example above, a life insurance policy on Mark’s life, along with a clear buy-sell agreement, Sarah would have the power and funds to purchase Marks’ interest and continue business as usual with minimal interruption.

2. Business Overhead Expense Coverage: Maintaining Operations During Periods of Illness or Injury

An illness or injury, whether short term or long term, can strike unexpectedly, leaving a business owner unable to work. This disruption can have a severe impact on the business’s daily operations and financial stability.

Imagine a scenario where the owner of a business suffers a serious car accident, rendering them unable to work for several months while they get treatment and heal. With the owner unable to oversee critical projects, maintain client relationships or generate new customers, there will be potential delays and likely loss of revenue. This could jeopardize the reputation, market position and financial well being of the business.

One solution to this risk is Business Overhead Expense Coverage. It is designed to cover essential business expenses during the period in which the owner is unable to work, such as rent, utilities, employee salaries and other fixed costs. By having this coverage in place, the business can continue to operate smoothly even during the owner’s absence, preserving its reputation and ensuring financial stability.

3. Wage Loss Replacement Plans: Safeguarding Employees

As a responsible employer, you understand the importance of supporting your employees during challenging times. In the event an employee faces an injury or illness that prevents them from working, a wage loss replacement plan becomes invaluable.

Consider a scenario where your top performing sales executive is injured and unable to work for a meaningful period of time. This poses the risk of financial hardship in the form of lost wages for the employee which will often lead to stress, dissatisfaction and the possibility of losing a valuable team member.

The solution is a wage loss replacement plan that will provide financial protection for employees allowing them to focus on their health and well-being. The sooner they recover, the sooner they can return to work which minimizes the interruption to the business. In addition this type of benefit demonstrates your commitment to your employees well being which fosters loyalty and reduces turnover.


In conclusion, protecting your business from unforeseen risks is not just a prudent step, but an essential one to secure its future. By taking proactive measures to manage these threats to your business, you can focus on growth with confidence and peace of mind that you have a solid safety net in place for any challenges that may arise.


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