The “Five D’s” are possible scenarios faced by all businesses. A well-prepared business contingency plan gives a business the ability to maintain the course, or to effectively change direction, in event of the “unforeseen.” A close examination of processes and scenarios will fortify your business in the event of:
In our recent blogs, we’ve discussed the first four of these “D’s.” We have now, unfortunately, arrived at the sad but inevitable fifth “D” of Death. We’ve already learned that 50% of business exits are NOT voluntary. It is vital for business owners to be ready, with plan in place, when the inevitable happens.
Death too often happens unexpectedly, and the death of a business owner can severely damage, if not completely destroy, the value of a business. This is particularly true if the business owner is critical to daily operations. If unprepared, your business shares the same mortality risks as its individual owners. The unexpected death of a proprietor is obviously devastating for a family; employees and other stakeholders are also affected.
When we begin working with business owners, our first step is determining the “de-risking” measures needed to solidify the company’s foundation. We initiate this challenging conversation by asking important questions, such as:
- Who will be running your business, even temporarily, if you or one of your business partner(s) died?
- Who knows the location of important documents, passwords and keys? How long will it take them to access and utilize these items?
- How does your estate plan address leadership succession and the future of your family and your business at your death?
- What preplanning has been completed for your funeral or memorial service?
- Which types of insurance products have you used to help your family and business upon your death?
- How well does your plan address liquidity concerns with estate and death taxes?
Death, distress, disability, divorce and disagreement are proven business killers. There is no time like the present to address these possibilities. It’s not an easy conversation, but you and your stakeholders (including family) will receive priceless peace of mind once you take the first step by reaching out to Eagle Corporate Advisors.