Congratulations! Whether you're a one-person operation with world headquarters in the back bedroom, or founding a company with a payroll that seems bigger than the California state budget — there is nothing that compares to the thrill and terror of working for yourself. Entrepreneurship presents great opportunities. It also involves great risks for both you and your family.

Becoming a business owner can be exhilarating beyond words. This is due in part to the opportunity for financial rewards. Of the handful of households with net worth in excess of $1 million, the vast majority are headed by business owners who enjoy median annual household incomes of $436,000.("The Millionaire Mind," by Thomas J. Stanley; Andrews McMeel Publishing, 2000)

But money isn't everything. There is also the freedom, the opportunity to take charge of your own destiny, and to do so on your own terms. Not dependent on anyone but yourself, you can take full responsibility for your own success or failure, determined to make or break it based on your own efforts, talents and hard work.

Still, the risks are great, and there are no guarantees. With more than 850,000 businesses calling it quits each year, bluntly points out the Small Business Administration, "Business turnover is the domain of small business." Between the long hours, the financial uncertainty and the daily surprises and frustrations, entrepreneurship can wear you out, run you down, leave you pulling out your hair.("Small Business Answer Card," Office of Advocacy, Small Business Administration, updated 4/20/99. URL: www.ace.org)

Risk management can help tip the odds in your favor. Business ownership requires taking risks. However, whether you have a crew of 30 people for whom you are responsible, or a payroll of one and commute downstairs in your bare feet to your lower-level office — there are steps you should consider to help manage the risk of being in business.

One key aspect of risk management is providing a safety net. That way, whatever "what-if" scenario occurs in your business life, you have a back-up plan. For instance, when you left your previous job to go into business for yourself, you also left behind employer-provided benefits. If you haven't already replaced these important "perks," you should do so now. Specifically:

• Make sure you have adequate life insurance to protect your company's greatest asset — YOU! The formula your old employer used to determine how much life insurance you received may no longer be enough. Obtain enough now to assure your family's financial dignity if you die prematurely. Use life insurance as a risk management tool to help protect their standard of living.

  Also, if you are like most new business owners, you depend on credit. When most new businesses borrow money, it is not uncommon for lenders to require a personal guarantee. If you died, your family could become responsible for your company's debts. A life insurance death benefit can help pay off those obligations.

• Don't overlook disability income insurance.^* If you became ill or were injured, how long could your business go on without you? How long could you continue providing for your family if you were not able to work? Disability insurance can fill that need.(*Issued by Provident Life and Accident Insurance Company or Paul Revere Life Insurance Company or Unum Life Insurance Company of America)
• Set up your qualified retirement plan to help guarantee your future. If you are in solo business, you can establish an SEP (Simplified Employee Pension), plus make contributions into an IRA. Or if you have employees, you can also participate in a profit sharing or pension plan.
• Insure your business against the loss of key employees. If you have key employees or co-owners, key employee life insurance — owned by and payable to the company — can soften the financial blow to your business if a key person dies.

Other points to ponder for the future, as your business grows and becomes established:

• Think about succession planning. Who will take the reigns when you are ready to step down? Perhaps you are not ready to think about it now. However, at some point, you will want to consider an insured buy-sell agreement that specifies who will eventually own the business and how the transfer is to be funded.
• Think about Executive Benefits. For yourself, co-owners and valued non-owner employees, there are ways to reward quality work, save taxes, and remove assets from the business. Options include deferred compensation, executive bonus plans and executive carve-out arrangements.

There's a lot to think about, and one thing is certain — as a new business owner, you are busy. It is sometimes difficult to know which details to tackle first. Fortunately, you don't have to go it alone.

Your New York Life agent can help. As a licensed insurance professional, he or she can provide insurance and financial product information and ideas, discuss your needs and then provide products to help you educate your decisions in a number of areas.

Don't delay. There's an old saying that goes: Take care of your business, and your business will take care of you. Have fun. Work hard. Take time for your family. And take care of your business by effectively managing your risk.

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