Alfred Longtin on Rethinking Risk: How Small Businesses Can Protect What They've Built

Int'l Business Times

20 hours ago

Small businesses are the backbone of the American economy. They account for 99.9% of all firms in the country and employ almost half of the private workforce. Still, despite their critical role, the odds are usually stacked against them. After all, around 20% of small businesses fail within their first year, and nearly 50% don't make it past the five-year mark. The reasons are varied, but the pattern is unmistakable.
Enterprise risk is a universal challenge. It's not uncommon for companies to encounter financial vulnerabilities that can unravel hard-earned progress. The question "What do businesses do to manage the risks that threaten their growth and longevity?" then emerges. Upon realizing that managing success is as complex as achieving it, Alfred Longtin, founder and CEO of Longtin Family Companies , made it his mission to support businesses that have worked tirelessly to reach a place of stability and continuous growth.
Longtin has over 35 years of experience advising entrepreneurs, business owners, and some of the largest family-owned companies in the United States. From business development and mergers to multigenerational estate and business planning, he possesses a vast background across disciplines. Growing up in a family-owned business, he found a passion for helping clients make better decisions through education, strategic insight, and access to specialized financial tools.
For instance, Longtin's advisory work has helped numerous clients access non-traditional sources of capital and establish structures that protect against the risks that conventional insurance usually overlooks. Essentially, his expertise, sharpened over decades of hands-on involvement, has positioned him as a respected voice in a complex area of financial strategy.
Over the years, Longtin has observed how small and medium-sized businesses (SMBs) are typically underserved when it comes to identifying and capitalizing on their existing uninsurable risk. "Many companies operate with tight margins. They depend on key customers and vendors and are vulnerable to external shocks. And those can be anything, from regulatory shifts to supply chain failures," says Longtin.
The seasoned professional adds that even when SMBs begin to scale and generate substantial profits, they can face crushing tax liabilities that strip away the capital they need to reinvest or protect their future. "Countless business owners experienced this," Longtin states. "They hired the right teams, expanded cautiously, and reinvested profits. But what happened? Unforeseen circumstances or structural disadvantages left them exposed."
Longtin saw a recurring problem. Businesses were succeeding. However, they're not necessarily securing that success sustainably. Longtin has focused much of his work on helping business owners navigate a strategy within the US tax code, which can allow for more sophisticated risk management.
Specifically, Longtin helps eligible clients utilize Section 831(b) of the Internal Revenue Code. It permits small and mid-sized companies to establish their own state-regulated insurance companies, controlled by the owners of the business and often referred to as "captive insurance companies." Under this structure, and with proper compliance, a business may shift a significant portion of its annual profits into its own insurance company. These are the funds that would otherwise be subject to taxation.
"Section 831(b) is an extremely underutilized tool in the world of risk management, despite most successful SMBs having great financial, risk, and tax advisory teams. My role is to change that and empower teams with the tools that were explicitly created to help them protect the business," says Longtin. "This provision was made because smaller companies needed a mechanism to manage their unique risks that are usually uninsurable."
Indeed, whether reputational damage, sudden loss of a critical supplier, or regulatory disruptions, many threats fall outside the scope of standard commercial insurance. Captive insurance allows businesses to formally insure against these kinds of risks while also retaining control over the capital and potentially building long-term reserves.
Longtin shares an example. "Imagine a company that has grown steadily over a decade and is finally generating several million dollars in annual profits," he states. "For owners in high-tax jurisdictions, this comes with a tax burden, sometimes exceeding 50% of net income. If that company works with a qualified advisor, they could redirect a portion into a captive. What happens then? They can retain more capital instead of paying a large portion of profits in taxes. The business can then reinvest, grow, or pass it on to future generations."
Longtin emphasizes that this isn't a one-size-fits-all solution. Captives must be structured properly, managed by qualified professionals, and built around real, documentable risk. Longtin ensures compliance and transparency in every step of the process, collaborating with highly specialized management firms to ensure these structures are administered in full accordance with applicable laws and best practices.
His work reflects a broader truth about the small business landscape. Success alone isn't enough. Many businesses fail because they aren't equipped with the right strategies to protect and grow what they build. By helping business owners implement advanced, legal, and often overlooked tools like 831(b) structures, Alfred Longtin can help bridge the gap between achievement and sustainability.