Most entrepreneurs start a business to get away from the 9-to-5 grind of a corporation. Your early focus is on survival as you try to generate as much revenue as possible. Hopefully, at the end of the year, your business is profitable enough that you can take home an income similar to or more significant than what you were making at your corporate job.

Once the business is rolling, it’s easy to forget some basics that will help you protect your business future and your own personal future. I have found that most of our small business owner clients don’t have these six protections in place.

Save for a Rainy Day

When business is good, human nature is to assume it will be good forever. We know that is not the case, as recessions and down cycles are a risk to every business. Ask a lender or general contractor what happened to their industry in 2007.

When your business is taking off, remember to put some money aside in an emergency fund.

We recommend that our small business owner clients keep six months of expenses in a liquid, high-yield savings account at all times.

Save for Retirement

Retirement is a dirty word to most entrepreneurs. Whenever I bring it up in client meetings, the response I get is something like this: “Matthew, I will never retire. My business is my life.”

I get it—if you have started a successful business, you are a high achiever. Your biggest concern is order fulfillment, marketing to a new customer, or creating new revenue streams. The last thing on your mind is saving for the future.

That said, there are lots of retirement account options for the self-employed, from SEP-IRAs, to solo 401(k)s, to IRAs, and many more. Utilizing one of these accounts today will help you put money away for retirement and bring a nice tax benefit for the current year.

Disability Insurance

As a small business owner, your future earnings are directly tied to you. Purchasing a disability policy that will pay your family income if you become unable to work is extremely important.

These policies can be kicked on for all sorts of reasons.

Most people balk at getting a policy for the cost, or they just don’t want to imagine a worst-case scenario.

Key Man Life Insurance

Speaking of insurance and worst-case scenarios, what would happen to your business and family if you passed away and didn’t have a life insurance policy?

You need a life insurance policy to protect your family from financial hardship. Putting a key man life insurance policy in place could help your business and family survive in your absence.

If you are relatively young, a term policy will make the most sense.

Professional Liability Insurance and Business Owner Policy

What would happen to your business if someone were to sue you tomorrow? This could be something as simple as falling in your office. Or a complicated case, like giving poor advice.

Without having these two policies in place, you could stand to lose your business or have to pay a lot of money to settle lawsuits.

Continuity Plan

A business continuity plan states how your business should be managed if you can no longer run it or there is a disaster.

Your continuity plan will cover:

  1. The triggering events (death, disability, licenses loss, etc.) and when a buyout process is triggered
  2. Provide an accurate industry-specific valuation method
  3. Determine and provide reasonable payment terms for the buyer of your business
  4. Provide information on policies and procedures so the next in line can step up at a moment’s notice

Once your plan is on paper, you need to test that it works. When you find flaws in the plan, you will need to address them accordingly.


Once your business is up and running, make sure you take the time to put the necessary protections in place to ensure your business will last in the worst-case scenarios. If you think this is too much of a headache, reach out to us, as we love doing this kind of work!