The document discusses four main areas of concern for small businesses: providing for employees and executives, protecting the business, preparing for business transfer or succession, and gaining personal financial independence. It then outlines various protection strategies for addressing each concern, such as setting up retirement plans, obtaining key person insurance, and creating succession plans. The document emphasizes the importance of business planning and provides tips for small business owners on getting started with protection strategies.

1. small business
protection
strategies
AXA Advisors LLC, New York, NY
GE-125786 (05/17)(Exp.05/19)

2. important notes
Securities are offered through AXA Advisors, LLC. Insurance and annuity products are
offered through AXA Network, LLC. AXA Network conducts business in CA as AXA
Network Insurance Agency of California, LLC, in UT as AXA Network Insurance Agency
of Utah, LLC, in PR as AXA Network of Puerto Rico, Inc. AXA Advisors and AXA Network
do not provide tax or legal advice. Ascend Planning & Consulting, LLC is not a registered
investment advisor and is not owned or operated by AXA Advisors or AXA Network.
Please be advised that this document is not intended as legal or tax advice. Accordingly,
any tax information provided in this document is not intended or written to be used, and
cannot be used, by any taxpayer for the purpose of avoiding penalties that may be
imposed on the taxpayer. The tax information was written to support the promotion or
marketing of the transaction(s) or matter(s) addressed and you should seek advice
based on your particular circumstances from an independent tax advisor.

3. important notes
AXA Advisors believes that education is a key step toward addressing your financial
goals, and this material is designed to serve simply as an informational and educational
resource. Accordingly, this material does not offer or constitute investment advice and
makes no direct or indirect recommendation of any particular product or of the
appropriateness of any particular investment-related option. Your needs, goals, and
circumstances are unique, and they require the individualized attention of your financial
professional. But for now, take some time just to learn more.

4. agenda
 The Small Business Environment
 Four Main Areas of Concerns for Small Businesses
 Protection Strategies for the Four Main Areas of Concern
 Benefits of Business Planning and Five Tips on Getting
Started
 AXA Advisors & Small Businesses
 Q & A

5. the big business of small business
The 28 million Small Businesses in the United States:
 Employ almost half of all private sector employees
 34% of known export value ($471 billion out of $930 billion)
 Generated 63% of new jobs annually over the last 15 years
The impact of small business is growing, but…
Source: Source: Small Business Administration — Office of Advocacy Frequently Asked Questions, 2016,
https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf

6. entrepreneurship
All new ventures carry some
degree of risk, but the rewards
of entrepreneurship can be
great!

7. creating small business
protection strategies
How can you increase your chances of business success?
By managing concerns in four different areas
1. Provide for your employees and executives
2. Protect your business from unexpected circumstances
3. Prepare for business transfer or succession
4. Gain your personal financial independence

8. 1. provide for
your employees and executives
Assessing the Concern:
 35% of Americans feel they will have to work to pay for living
expenses during retirement 1.
 More than 50% of disabled Americans are in their working
years, 18-64 2.
1 http://www.ajc.com/entertainment/percent-americans-plan-work-during-
retirement/411eHNLWjm7PPj9qi2bqlL/
2 https://disabilitycompendium.org/sites/default/files/user-uploads/2016_AnnualReport.pdf

9. 1. provide for
your employees and executives
Protection Strategies:
 Setting up a retirement plan may
cost less than you think
 Having a disability plan in place
Goal
Recruit, retain and
protect employees

10. 1. provide for
your employees and executives
Key Considerations:
Which retirement plan best suits your business?
 Simplified Employee Pension plan (SEP)
 Defined Benefit Plan (traditional pension)
 Savings Incentive Match plan (SIMPLE)
 Deferred Profit Sharing plan
 401(k)

11. 1. provide for
your employees and executives
Assessing the Concern:
 CEOs salaries are less for smaller companies.* Retaining top
executives is highly competitive.
 Traditional retirement plans do not usually meet the planning
needs of top executives.
*Source: Chief Executive’s 2015-2016 CEO & Senior Executive Compensation Report -
http://chiefexecutive.net/ceo-pay-in-private-companies/

12. 1. provide for
your employees and executives
Protection Strategy:
 Executive benefit plans are designed to meet the specialized
needs of highly compensated employees
 Example: Non-Qualified Executive Compensation Plans
 No contribution caps
 Can be designed to financially encourage retention
 Can be inexpensive to set up and maintain
 Can be put in place in less than a month
 Can be implemented without increasing the employer's current payroll
taxes and can even reduce current payroll based on plan design

13. 1. provide for
your employees and executives
Key Considerations:
How might executive benefit options work for your business?
 Executive Bonus Plans
 Deferred Compensation Plans
 Split Dollar Plans
 Group Carve Out

14. 1. provide for
your employees and executives
Key Considerations:
How can a business owner prioritize these benefit features?
 Deductibility — Whether or not there is an employer tax deduction
 Control — How much control the employer or employee has over benefits
 Selectability — How employers can select who receives certain benefits

15. 2. protect your business
Assessing the Concern:
 For example, if your current business partner passes away,
it’s possible that his/her spouse could legally become your
new business partner
 The loss or departure of a key employee can mean the loss of
profit, clients, proprietary knowledge and specialized skills

16. 2. protect your business
Protection Strategy:
 Business protection programs
protect against the loss of an
owner, partner or key person
Goal
Protect your business
against the loss of
a partner or key employee

17. 2. protect your business
Key Considerations:
How can these services protect my business?
 Buy-Sell Agreement
• Legal agreement that details what will happen at death, disability or
retirement of a business owner
 Key Person Coverage
• Insurance that protects the business against the death or disability of a key
person in the business

18. 2. protect your business
… More Key Considerations:
 Business Overhead Expense
• Disability insurance allows a small business owner to meet everyday
business expenses, throughout the disability period
 Disability Buyout
• If a partner becomes disabled, policy provides funds to the non-disabled
co-owner(s) to buy disabled partner’s share of the company
 Employee Stock Ownership Plans (ESOPs)
• Qualified retirement benefit plan

19. 3. transfer your business
Assessing the Concern:
 Only 30% of family owned businesses survive the transition to
the second generation, and about 12 percent to a third.
 A primary reason for this dismal survival rate lies in poor
succession planning.
Source: The Family Business Institute, Succession Planning, http://www.familybusinessinstitute.com/index.php/Succession-Planning,
accessed February 19, 2015

20. 3. transfer your business
Protection Strategy:
 Written succession plans
outline legal, financial and
managerial considerations
for transferring a business
from one owner to the next.
Goal
Successfully
transfer your business
when you are ready
to move on

21. 3. transfer your business
Key Considerations:
How do each of these issues affect Succession Planning?
 Family Limited Partnerships, Family Limited Liability Companies,
IDGTs, GRATS, etc.
 Business Valuation
 Gifting vs. Selling the Business
 Tax Impact of Transfer

22. 4. plan for your personal independence
Assessing the Concern:
 The primary source of capital for most new businesses
comes from savings and other personal resources.1
 Three-quarters of business owners who do not offer a plan
said that under current circumstances, they would be no
more likely to offer one in the next two years than they are
now..2
1. Small Business Administration, “Finance Start-up” https://www.sba.gov/sites/default/files/Finance%20Primer_0.pdf2.
Accessed February 20, 2015
2. http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/01/small-business-views-on-retirement-savings-plans

23. 4. plan for your personal independence
Protection Strategy:
 Maintaining separation between
business and personal planning can
help address the concern and is a
good practice.
Goal
Plan for your non-business
financial needs
Examples:
GOAL BUSINESS PERSONAL
Pass on assets Succession Plan Estate Plan
Retire comfortably Business Continuation Plan Retirement Plan

24. 4. plan for your personal independence
Key Considerations:
How can I plan for each of these needs, regardless of
the state of my business?
 Asset protection
 College planning
 Family protection (income replacement)
 Retirement savings
 Retirement income distribution
 Elder care

25. additional benefits to business planning
 Save time
 Improve tax efficiency
 Compete effectively
 Handle change
 Manage growth

26. 5 practical tips on getting started
1. Survey employees. Ask them about their employee benefit
concerns and needs.
2. Make a list of the employees and executives that are
“irreplaceable” to your business.
3. Make a list of who you would want to replace your position or
other key positions if something were to happen unexpectedly.
4. Review your personal plan periodically. Business owners’ needs
change frequently.
5. Seek professional guidance. A financial professional can help you
sort through the information you’ve seen in this presentation, and
help you create protection strategies for your business.

27. AXA Advisors & small businesses
AXA Advisors can offer:
 More than 5,000 financial professionals in over 145 U.S. branch and
district offices
 A wide array of small business products and services from affiliated
and unaffiliated companies
 Retirement plans customized for small businesses
 Planning coordination with business owners’ other advisors (legal, tax)
 Planning services through each business stage — start-up, growth,
maturity and transfer

28. 27
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believe in the impact of financial education.
your feedback

29. If you’d like to schedule a
complimentary initial consultation,
please email us at
info@ascendplanning.com
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