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This article by Kathleen McGinn Spring was prepared for the August 7, 2002 edition of U.S. 1 Newspaper. All rights reserved.

Avoid Business-Busting Mistakes

The 70-year-old president of a 30-person business stopped

in to consult with Jason Weigand, a financial advisor, about,

among other things, business continuation. "He was the business,"

says Weigand, vice president of Flanagan Financial Group at 100 Overlook

Center. "He was the company’s intellectual property." The

business owner procrastinated a bit in finalizing the continuation

plan, and in the meantime signed a number of contracts that were contingent

upon his involvement.

Then he became ill and underwent a double by-pass operation. "That’s

it," says Weigand, "now they can’t do any insurance on the

guy at all."

Procrastination, all too common in busy small companies, could spell

the end of this business. "If he’s not around, all of the contracts

are null," says Weigand. Had continuation plans been in place,

had work been delegated, the situation would be more secure, for the

company, for the president’s family, and for the company’s employees.

This scenario occurs "all the time," says Weigand, and is

one of the mistakes he and Brad Silver, president of Concorde

Financial Advisors, also located at 100 Overlook Center, will address

at an upcoming interactive seminar.

On Thursday, August 8, at noon, the two co-host a free "Business

Killers Luncheon: How to Avoid Mistakes that Can Destroy Your Business"

at Concorde’s offices on the second floor of 100 Overlook Center.

Joseph Murray, president of First Financial Advisors, speaks.

Call 609-375-2379.

Both Concorde and Flanagan offer financial planning advice to small

and mid-sized businesses, to their employees, and to high net worth

individuals. The two companies, with 12 Princeton-based account representatives

between them, are in a strategic alliance: Concorde, with what Weigand

describes as an international client base, accesses the products of

Massachusetts Mutual through Flanagan, a financial group that was

founded in Philadelphia in 1889 and moved into Overlook Center in


Silver, a native of Queens, graduated from Hofstra in 1982 with a

degree in marketing and finance and has worked in the securities industry

for his entire career. Weigand, who grew up in Philadelphia and Lower

Bucks County, graduated from Drexel in 1993 and was an agency director

with Met Life in Princeton before joining Flanagan in January.

The two explain that their seminar consists of a CD-ROM presentation

by professional actors augmented by input from themselves or from

a guest speaker. The seminars are designed to get business owners

and decision makers to evaluate how well they are prepared for a number

of milestones, including growth and retirement, how well they are

positioned to avert a number of business-breaking disasters, and how

good they are at keeping tax liability to a minimum. Among the topics

the seminar addresses are:

Keeping valuation current. Many businesses, says Weigand,

have never had a valuation done, or are relying on a 10-year-old evaluation.

That old valuation may show that the company is worth $500,000, when

it may now be worth $2 million, he says. Problems with underestimating

value could include insufficient insurance coverage. On the other

hand, says Silver, three new competitors may have moved in to town

and the business that was worth $500,000 a decade ago may be worth

a whole lot less now. An owner planning to sell soon for that $500,000

could be in for a rude awakening.

Funding retirement. Many business owners count on the

companies they have lovingly grown to fund their retirement. "I’ve

had business owners say to me `Why should I put money into the stock

market? I can get a better return from putting it into my company.’"

relates Silver. The answer, he says, is the same one given to those

inclined to put all of their money into one stock. It is just too


Business owners, points out Silver, could easily live for 30 years

past retirement if they chose to walk out the door for the last time

at age 65. They will need a number of sources of income, not just

proceeds from the sale of the business, or a pension pay-out from

the business.

Giving Uncle Sam his due. Taxes must be paid, but businesses

would do well, advise Silver and Weigand, to hire a specialist to

make sure they are paying what is required, but not more. "If

you get a refund back," says Silver, "you’re paying too much."

Facing facts. Sadly, disability happens, as does death,

and disaster — natural and man-made. On a less drastic level,

business conditions change, sometimes quickly and dramatically. Business

owners who want to spare their families, business partners, clients,

and employees major disruption and financial pain will acknowledge

this fact, and secure adequate insurance, prepare continuation plans,

and put them in writing. They will also make sure that key executives

delegate more and more responsibility as they approach retirement


It is entirely possible that Weigand’s 70-year-old client will

return from his by-pass operation robust and ready to roll for a couple

of more decades. Other business owners and key executives may not

be so lucky. Not happy stuff to contemplate, but the two financial

advisors have seen too many cases in which a little advance contemplation

could have spared a company — and its people — a lot of angst.

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