Startup Operations: Legacy Planning, Benefits and More | Tory Burch Foundation

Insurance policies. Safety nets. Succession plans. None of these feel urgent when you’re dreaming big. But smart entrepreneurs know these oft-overlooked issues are the foundation of a thriving business. It’s the work that makes everything else possible. Startup operations are invisible when things are going well and painfully obvious when they’re not.

Employee benefits, for instance, help you recruit and retain the right talent—which, in turn, frees you to lead and be a business owner, not a business operator.
As a partner and private wealth advisor at Legacy Wealth Planning, Cassandra Stahl knows the behind-the-scenes moves to set you and your company up for success. She joined our webinar series to break down the major considerations you can’t afford to ignore.

BALANCE BUSINESS AND PERSONAL GOALS.

Rethink your goals to address not just the business but yourself, too. “Your business must fuel you; otherwise, you burn out,” Stahl explained. “Mine affords me the ability to be the mother, wife, daughter, and friend I want to be.”

Prioritize your list by scoring each goal on a simple one-to-10 scale—where one is negligible and 10 is critically important. Don’t mark anything a five; that’s just indecision.

Sample goals from her clients include:

• Ensure the business keeps running if you can’t work.
• Recruit, retain, and reward your top talent.
• Evaluate your investment portfolio outside of the business.

PROTECT THE BUSINESS, PROTECT THE TEAM.

First up: risk management. You need to protect your business against the unexpected.Is your liability insurance up-to-date?

Have you properly safeguarded your intellectual property? What about your ability to generate income or pay expenses if you can’t work—or a key employee suddenly can’t?

“We get asked these questions in a panic, but they’re easily solved,” said Stahl, noting that the answer comes down to insurance—what type you need and how much is appropriate.

Next: employee benefits. Just as you protect your business, you need to do the same for the people who keep it running.

Think about the goal of your benefit strategy. Are you doing it to attract and retain talent, or for tax advantages? Understanding the why will inform what you choose, how you roll it out, and how much to invest.

A benefits package typically covers the essentials—healthcare, dental, vision, life, and disability—as well as a qualified retirement plan. For key employees, also consider survivor and disability income, long-term care, and a non-qualified executive benefit plan, which gives additional retirement and compensation to key team members. Stahl explained: as profits and extra cash flow build, don’t just compensate the owners, but top talent, too.

Get feedback on what your employees think of their benefits. Ask yourself, how would you feel about starting a job with them? Look at your competitors’ plans—how does yours compare?

Remember, you need to make people feel safe, valued and heard. “Make the seat sticky,” said Stahl, “so they want to start and end their career with you.”

Your business must fuel you; otherwise, you burn out.

STRENGTHEN YOUR FINANCES.

“Your money should be like lighter fluid on your vision,” Stahl said. “It should pull you forward.” In other words: don’t let it limit you, and don’t push it to the back of your mind.

Stahl acknowledges that, early on, your personal finances are often tightly linked to your business finances—but it can’t stay that way forever. “You need to draw lines,” she said, adding that your personal and business liabilities also need to be separate.

To plan ahead, begin with the following questions: If you became sick or disabled, what would happen to your business? Your personal finances? How would your family manage without you? (Don’t forget to include survivor and disability income, or long-term care, for them.)

When it comes to retirement planning, Stahl suggested saving monthly—the most efficient way to invest. But if you have periods of unpredictable revenue, contribute when you can. “Start where you are,” she said, “and implement systems so you can do monthly contributions. That’s the goal.”

PLAN FOR YOUR LEGACY.

Think critically about whether you want to pass the business on, sell it (at a discount or not), wait for a competitor or private equity firm, or simply close it. How will you recoup your investment and gains from the business when you leave?

Lay the groundwork by determining the business value, even if retirement is years away. You need to know two figures: what it’s worth, and what it would need to be worth for you to sell and never work again. Why? Stahl recalled a client who had no intention of selling—until, out of the blue, someone made him an offer that was greater than his dream figure. Be prepared.

Also, when evaluating, don’t forget to account for all asset types. That means physical assets (e.g., buildings, machinery, and trucks); human capital (staff, not contractors); and intangibles, such as brand reputation, customer relationships, and overall goodwill. And don’t overlook yourself—your leadership, connections, and presence matter, too.

Have a family business? Make sure you’re ready to let go and your successors are both willing and ready to take over—and establish rock-solid agreements in advance “when everyone is still in the honeymoon phase,” said Stahl. Outline how much you get, how payments will work if someone can’t continue (via company funds or an insurance policy?), and what happens if someone exits early.

Stahl also suggested a buy-sell arrangement, which decides what happens to a founder’s share in the event of death, disability, or voluntary exit. For couples, if the business existed before the marriage, you may need a prenuptial agreement that notes it is not a marital asset.

ADAPT TO YOUR STAGE.

Depending where you are in your business, you may need to adjust the approach.

With startups, for instance, much of it is tactical—covering the bases and putting protections in place. Did your financials take a hit as you transitioned to founder? Think through how you’ll recover to make it worth it.

As your business expands, consider how you can leverage that growth to build your personal wealth. Review your legacy goals and charitable plans, too.

The exit stage is typically the least planned—and the trickiest. It’s important to plan ahead so you’re not caught off guard. “Eat the elephant one bite at a time,” Stahl advised. “Progress is better than perfection.”

MOBILIZE THE EXPERTS.

Good news: you don’t need to have all the answers. Stahl stressed that these four advisors, working in sync, are an essential asset for founders seeking a customized plan. Just make certain they’re full-time experts in their field.

Banker

Your go-to for accounts and loans. Choose someone you know and trust, who understands your business and works from conversations, not a checklist.

Attorney

“First stop should not be an estate planner,” Stahl said. Find an attorney who is well connected and well-versed in operating agreements.

Accountant

This person must know business incorporation inside and out and offer proactive recommendations. Stahl cautioned that most accountants are focused on “today,” e.g., maximizing a tax refund. You need someone forward-thinking, or you’ll pay for it later.

Financial Advisor

Target fiduciaries and CFPs (certified financial planners)—they’re highly regulated and held to the strictest legal standard. Avoid advisors who charge per transaction; it often leads to a conflict of interest.

Ask your network for recommendations, and of course, do your due diligence before entering a relationship with any of these professionals. “Share the burden so you can go forth more purposefully and efficiently,” Stahl said. “Run toward the roar.”