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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


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


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. The

value of a business is affected by so many factors. General economic

conditions, 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 owner

to have in mind a current valuation.

Problems could occur, for instance, if a partner dies, and the buy/sell

agreement indicating the amount to be paid to his estate grossly overestimates

the real time value of the business. Insurance, of course, is another

issue, as is the ability to quickly evaluate any buy-out offers, and

to plan an exit.

I’m too busy running the company. This is one that financial

advisors hear all the time. It is common, says Benli-Smith, for a

business owner to immerse himself so deeply in the day-to-day operations

that the big picture receives scant attention. Among the casualties

could be planning for a smooth transition should the business owner

want — or need — to scale back his involvement or retire.

That will never happen to me. The same sure sense of immortality

that keeps so many people from drawing up wills, makes many small

business owners assign a low priority to planning for any long-term

disability. Add time pressure, and not much thought goes into what

would happen if a key employee became ill or jumped ship.

There’s plenty of time for that. "Business owners

are reinvesting in growing the business all the time," says Benli-Smith.

"They don’t think ahead." As an example, she says, many service

station owners failed to pay attention to a growing environmental

movement, and were caught unawares when the EPA ordered them to dig

up their older, in-ground gas tanks. No money had been set aside for

the considerable expense, and, she says, "a lot went bankrupt."

My business is my retirement. This is your basic all-eggs-in-one-basket

problem. Plowing money back into their creation is so compelling for

many small business owners that they don’t diversify. The business

may provide enough income to fund a retirement, or its sale may provide

a thick enough cash cushion — or not.

You can’t beat Uncle Sam. Well, maybe not entirely, but

Benli-Smith says there are any number of perfectly legal strategies

available to small business owners who want to shelter as much of

their company’s income as possible.

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