Is It Time to Stress Test Your Business Planning?
Key Points to Consider:
Review your exit strategy to ensure it aligns with your future goals.
Evaluate how well your assets are protected against legal challenges.
Reflect on whether your retirement plans are serving their intended purposes for you and your business.
As a leader in manufacturing, you’ve put extensive effort into steering your company and team towards success. But when was the last time you checked if your strategies were still paving the way to the outcomes you aim for? If you're unsure, it might be the right moment for a stress test.
Stress testing means rigorously evaluating your business and personal financial strategies to see how they hold up under different scenarios. This helps determine if your current plans are likely to achieve the results you desire.
While once a practice of the very wealthy, stress testing has now become vital for entrepreneurs at all levels to fine-tune both personal and business strategies.
Why Consider Stress Testing?
Stress testing isn’t just about the financial products or legal tools you use. Although it might highlight better options available, its primary goal is to check for disconnects between your objectives and the likely outcomes of your current strategies.
A crucial aspect of stress testing is the human element—how your plans affect you, your loved ones, and your business connections personally and emotionally.
Experts who conduct stress tests don't just rely on advanced tools; they are adept at identifying the right strategies and tools that align with your specific personal and business goals.
Areas to Focus on in Stress Testing:
Exit Planning: Ensuring you minimize future estate taxes is a crucial part of exit planning. It's worth checking whether locking in your business’s value now could save your family significant money later, especially if you plan to sell your business.
Asset Protection Planning: With most entrepreneurs worried about unjust lawsuits, it's critical to assess whether your asset protection strategies are comprehensive. Consider if your corporate documents, insurance coverages, and business structures are robust enough to shield your wealth.
Retirement Planning: Many business owners utilize retirement plans not just for tax benefits, but also to attract and retain top talent. It’s beneficial to reassess your current plan’s effectiveness in achieving these goals or if there might be other plans that could serve better.
Should You Conduct a Stress Test?
Though stress testing can be costly and time-consuming, the investment might be worthwhile if it’s been years since you last reviewed your strategies, especially with recent changes in tax laws and regulations.
Reflect on these questions:
When did you last reassess your business structure or the protective measures in your corporate documents?
Are you fully utilizing all available corporate risk mitigation strategies?
Are your retirement plans optimized to benefit you and your business to the fullest?
Stress testing isn't just about correcting past mistakes—it's about ensuring your planning is current and taking advantage of new opportunities that could significantly benefit your business and personal life.
Ultimately, stress testing key areas of your business can provide the clarity and confidence you need to push forward, ensuring your business not only survives but thrives.
Investment Advisory Services offered through Brookstone Capital Management (BCM) LLC, a Registered Investment Advisor. Silvertree, LLC and BCM are separate companies. This is not an investment, tax, or legal recommendation or a solicitation to become a client of the firm.
About the Author
Jason Glisczynski, CPWA®, CFP®, CAS®
CERTIFIED FINANCIAL PLANNER™ Professional
Jason specializes in helping individuals with planning for retirement and has nearly 20 years of advisory experience, is a Certified Private Wealth Advisor® professional, CERTIFIED FINANCIAL PLANNER™ professional, an Investment & Wealth Institute® member, and author of the International Best Selling Book Planning with Purpose: Solving Your Unique Retirement Puzzle.
Jason Glisczynski is co-owner and principal advisor for Silvertree, LLC. Investment Advisory Services are offered through Brookstone Capital Management (BCM) LLC, a Registered Investment Advisor. Silvertree, LLC and BCM are separate companies.