By Matt Redshaw
As an entrepreneur, you have worked hard, taken risks, lived through ups and downs, and grinded it out year after year. It can take years to achieve the level of success you set out to achieve.
Many are achieving success in their business, but don’t have all the pieces of the puzzle in place to ensure they will be successful, regardless of how well their business does.
How would it impact your business if something happened to you or your health? What if you faced significant litigation or a cyber attack? What if the market you operate in changed completely, such as we are seeing in the brick-and-mortar retail space today?
Smart entrepreneurs plan for risk. In his book Great By Choice, Jim Collins calls this “productive paranoia” – planning for the absolute worst, while aiming for the best. Proactive business owners cover off their key risks and create a plan to build wealth outside of their business.
Let me give you an example.
One of our clients owns and operates a successful company. He and his wife are only 34 and generating significantly more profit than their family needs to live on. Yet they haven’t upgraded their pickup truck to a Ferrari, or bought a new cottage in Kelowna. OK, they did buy a ski boat last summer, but for the most part they haven’t changed their lifestyle. They are taking from their profits and investing outside of their operating business – both in real estate and a variety of other securities.
Their goal is to build a business with significant value, and assets outside of the business, which can provide for them now and in the future. If something were to change in their business, circumstances or personal health, there are other sources of wealth to draw upon. They will have income from real estate, other investments and insurance.
Do you have a plan for success that isn’t entirely dependent on your company succeeding? Do you have wealth outside of your business? A proactive team of advisors working together, including estate, insurance, investment, legal and tax can help you build a plan and ensure you cover off key risks.