If you are like many small business owners, much of the success of your business depends on your employees. Often times, there is a core group of contributors who help drive your business. So how do you protect your business when the financial security of your business can change with the loss of a key person?

There are many defined contribution plan options, but they generally fall into three distinct categories - profit sharing plans being one of them. With a traditional profit-sharing plan everyone receives the same percentage of pay as a contribution. This plan is appropriate if only owners of the business are eligible to participate.

An Executive Bonus Plan, also referred to as a Section 162 plan, allows a business to provide personally owned life insurance as a tax-deductible fringe benefit to select key employees. The policy cash value grows tax-deferred and may be accessed through withdrawals or policy loans.

Your business may enter an arrangement with your highly compensated or select group of management and provide them with a supplemental retirement arrangement that is tailored to both the business and executive’s needs.

Have you taken the steps to ensure that your business will continue to run smoothly if you were to lose a business partner? Have you considered what will happen in the event of divorce, disability or even worse, death? A buy-sell agreement can establish the value of the business, assure that there is a buyer for the business and improve creditworthiness of the business.

A big portion of your retirement plan is probably dependent on selling your business. With a carefully crafted business transition plan, you can help meet your retirement goals and successfully transfer your business. Even if you are not depending on your business for retirement, you may be planning for the ultimate transition it to family members.