Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the October 30, 2002 edition of U.S. 1 Newspaper. All rights reserved.
Beware the Business Killers
Jennifer Benli-Smith is a financial services professional
with Flanagan Financial, a company with offices in 100 Overlook Center.
She and her partner, Stan Checkowski Jr., specialize in the
insurance and investment needs of small businesses.
On Wednesday, November 6, at 8 a.m., Checkowski speaks on “Business
Killers: Six Mistakes that Can Kill Your Business” at a meeting
of the Mercer Chamber at Mercer Oaks. Price: $20. Call 609-393-4143.
Checkowski is the member of the team officially certified to give
the Business Killers seminar, a proprietary product of Mass Mutual,
but Benli-Smith does a lot of the talking. “Stan knows all of
the technical stuff,” she says. “But I have the gift of gab.”
Benli-Smith, a graduate of Walnut Hill (Class of 1991), started her
career in hotel and restaurant management. A certified pastry chef,
she still enjoys baking for friends and family — cheesecake and
pulled sugar confections are specialties — but has little good
to say for life as a professional chef. “It used to be my passion,”
she says of baking, “but when I started to get paid, it wasn’t
anymore.”
Why so? “People think the restaurant business is going to be like
it is on TV,” she explains. “Everything is prepped and you
just toss it into a pan.” Not only is there a whole lot more chopping
and dicing involved than one might imagine, but the atmosphere is
far from the gay chatter so much in evidence on televised cooking
programs.
Restaurant management was not a whole lot better. Her management assignments
took her into a number of facilities, including those on the campuses
of Rider University, Westminster Choir College, and Princeton University.
There she found low status and unappreciative clients. “The kids
are horrible,” she says of the students in the dining halls.
Now she has moved up to a more mature client base grappling with issues
that, in general, are more weighty than the variety on a salad bar
or the selection of desserts. Small business owners, she points out,
not only need to turn a profit, but also need to look after their
own futures in a situation where there is no munificent employer to
bestow health, disability, and life insurance, or to provide —
or even guide — a comfortable retirement.
She talks about six traps — business killers — that commonly
ensnare busy owners of small businesses:
I know what my business is worth. Maybe, maybe not. Thevalue of a business is affected by so many factors. General economicconditions, new competition, property values, demographic trends,a change in consumer preferences; the list of variables is endless.Yet, Benli-Smith emphasizes, it is important for a business ownerto have in mind a current valuation.Problems could occur, for instance, if a partner dies, and the buy/sellagreement indicating the amount to be paid to his estate grossly overestimatesthe real time value of the business. Insurance, of course, is anotherissue, as is the ability to quickly evaluate any buy-out offers, andto plan an exit.I’m too busy running the company. This is one that financialadvisors hear all the time. It is common, says Benli-Smith, for abusiness owner to immerse himself so deeply in the day-to-day operationsthat the big picture receives scant attention. Among the casualtiescould be planning for a smooth transition should the business ownerwant — or need — to scale back his involvement or retire.That will never happen to me. The same sure sense of immortalitythat keeps so many people from drawing up wills, makes many smallbusiness owners assign a low priority to planning for any long-termdisability. Add time pressure, and not much thought goes into whatwould happen if a key employee became ill or jumped ship.There’s plenty of time for that. “Business ownersare reinvesting in growing the business all the time,” says Benli-Smith.”They don’t think ahead.” As an example, she says, many servicestation owners failed to pay attention to a growing environmentalmovement, and were caught unawares when the EPA ordered them to digup their older, in-ground gas tanks. No money had been set aside forthe considerable expense, and, she says, “a lot went bankrupt.”My business is my retirement. This is your basic all-eggs-in-one-basketproblem. Plowing money back into their creation is so compelling formany small business owners that they don’t diversify. The businessmay provide enough income to fund a retirement, or its sale may providea thick enough cash cushion — or not.You can’t beat Uncle Sam. Well, maybe not entirely, butBenli-Smith says there are any number of perfectly legal strategiesavailable to small business owners who want to shelter as much oftheir company’s income as possible.Previous StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
