by Scott Koski

Three Phases of a Small Business – Part 2: The Growing Company


The number of companies that make it through the first four years of operation is lower than most may think, around 45%. After four years of continuous operation hopefully you are creating consistent profitability and a sense of stability throughout the organization.  Some small business owners will be very content to operate in the successful capacity that they have become accustomed to, while others strive for growth and expansion.  While both have their own unique challenges, we will focus on three critical components of successful continued growth and success.

  • Compensation & Benefits
  • Insurance Programs
  • Additional Financing Options

Compensation & Benefits:  The success of any business has to do largely with the investment in its employees.  Putting programs in place will help in the retention of these employees will help in the continuity and eventual perpetuation of a business.  The following are some examples of the programs and benefits you typically see as companies grow:

  • Deferred Compensation
    • Pension
    • Profit-sharing
    • Stock Options
    • 401K
    • Healthcare plans
      • HMO (Health Maintenance Organization)
      • PPO (Participating Provider Options)
      • POS (Point of Service / Hybrid)
      • Additional benefits
        • College saving programs
        • Life Insurance
        • Wellness Programs

Insurance Programs:  Typically, the larger the organization, the larger and broader the potential loss exposures are.  Most business owners are familiar with the standardized insurance policies for their businesses.  However, without an experienced risk manager / insurance agent, there are many important coverages that can get overlooked, such as:

  • Professional Liability (Errors & Omissions)
  • Directors and Officers
  • EPLI (Employment Practices Liability Insurance)
  • Fiduciary Liability
  • Cyber Liability
  • Key Person Insurance

Additional Financing Options: Growth of a business will usually require the raising of additional capital.  This could be the result of additional space needed, real estate, IT, or any factor related to growth.  There are various lending sources to be investigated, including some that may not have been an option in the infancy of the company.  Each option deserves an in-depth evaluation to see if it is the most viable for your organization. The following are several examples of these additional professional lending services:

  • Banks
  • Strategic Partners
  • Angel Investors
  • Venture Capitalists.

Only the business owners can decide which approach is right for their company. Assessing processes will become more complex, as goals escalate and new challenges arise.  Yet, this is further confirmation that it is of the utmost importance to have your experienced team of advisors with you throughout the process.

National healthcare open enrollment starts November 1st and ends on December 15th. To make an appointment with one of our trusted advisors please contact us at 906.228.7500.

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