Business owners work hard to build a business, you should work hard to help them protect what they have built. Business succession planning is an important consideration. Understanding and effectively communicating business transfer options involves identifying the various forms of buy-sell agreements as well as understanding the funding options. You should also be comfortable working with your clients other advisors to assure that a proper business valuation is in place and proper legal documentation is drafted.
The benefit of a buy-sell agreement cannot be overstated. A properly structured buy-sell can address and help eliminate potential problems or issues before they arise. For almost all business owners, a well designed and funded business succession plan may help bring security and peace of mind for the business owner's personal and business family.
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The companies of National Life Group® and their representatives do not offer tax or legal advice. For advice concerning your own situation, please consult with your appropriate professional advisor.
Discussing the Opportunities
A buy-sell agreement protects a business if the owner were to die, become sick or disabled, or if they elected to terminate their employment early or retire. Without a plan in place, a business and its owners could experience:
- Cash flow shortage
- Inability to pay debts
- Lack of income for the business owner, their family and their employees
- Insufficient resources to pay required taxes - federal and state
There are tools available to help you share the importance of business continuation planning.
Identifying Options and Benefits
There are common types of buy-sell agreements available. If you are discussing buy-sell with a business owner client it is important that you are comfortable with the various options. Each type of plan has its own unique features and benefits.
- Entity Purchase Buy-sell
- Cross Purchase Buy-sell
- Wait and See Buy-sell
Be prepared to help your clients "Try on the Solution!"
How do buy-sells work? Have you ever tried to describe the mechanics of a buy-sell? This PowerPoint presentation will assist you in showing a client how the concept works.
A properly drafted buy-sell agreement could save a business owner, the company and their heirs a significant amount of money and ensure that assets are passed on quickly and without delay. Help your client understand why a buy-sell is important, how a buy-sell works, and the basic funding concepts available.
This presentation helps you and your client take a journey, exploring why a buy-sell is important, how a buy-sell works, the basic funding concepts available and interactive calculators that help demonstrate the cash flow of installment buy outs and buy outs funded with life insurance.
Materials have been developed to help you effectively discuss the value of a buy-sell agreement with your business owner prospects and clients.
Buy-Sell for Business Owners APC
Your Business Owner Stress Test
Buy-Sell Consumer Brochure
If you have additional questions or need further support, please contact the Advanced Marketing team.
National Life Group Agents
Main Street Buy-Sell
The Main Street Buy Sell program provides you with all the tools and special underwriting opportunities needed to successfully work in this market. The target market is our Main Street business owner, where the business is valued at $2,000,000 or less.
Much of this material has been placed in the National Life Group agent portal – just sign in and follow the links to all the information you need.
This digital story board is the tool to use from open to close when discussing a buy sell with your client. It will help you to illustrate why business owners should have a buy sell with funding calculators that demonstrate cash flow associated with the installment and insurance funding options.
An essential part of the Main Street Buy Sell program is the streamlined underwriting program that is in place for business’ valued at $2,000,000 or less. For more information, please log into the Agent Portal here to visit the Main Street Buy Sell Program. This section will help you understand the special underwriting offer and will direct you to the special cover letter for use in buy sell cases.
Business valuation is a vital part of buy sell planning. Setting the value of a business can be accomplished through a number of methods. Special access to the BizEquity tool will provide your client with insights as to the possible valuation of their business. BizEquity is a third party vendor and not associated with National Life Group. Please log into the Agent Portal here to visit the Main Street Buy Sell Program.