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WHAT IS A BUSINESS CONTINUITY PLAN?

November 11, 2019

WHAT IS A BUSINESS CONTINUITY PLAN?

Business continuity plan checklist

Do you have questions about a business exit plan? Schedule your free 15-min. call today >>>https://bit.ly/2y85PTq

KEY TAKEAWAYS

What happens to your business if you die or become incapacitated before you exit your business?

A business continuity plan provides guidance and peace of mind to your family and employees in the days, weeks, and months following an unexpected exit from your business, yet it’s something that very few business owners have in place.

The good news is that it’s quick, easy, and inexpensive to create a business continuity plan for your business. 

In today’s video, I’m explaining what a business continuity plan is, its key components, and how it can be an essential guidebook for your family and employees if you die or become incapacitated.

Click here to watch the full video or read the full video transcript, below.

What Is A Business Continuity Plan?

A business continuity plan, from the standpoint of exiting your business, addresses the family side of things and addresses details in the case of an unexpected exit. You might feel like you are covered with your buy-sell agreement, but these agreements are not robust enough to cover every type of circumstance in what will happen if you exit under various scenarios, death, incapacity, etc.

We are bringing all these things together in one plan that you can keep handy at all times.

Your Business Continuity Plan Outline

1. Who should tell your employees that you’ve died, or you’ve become incapacitated and how should it be done?

It’s important to designate one person to do this, someone that hopefully knows your employees.

  • Do you want your employees told in person?
  • Do you want your employees told right away? Waiting too long can spark rumors. 

2. Should customers or clients be informed and how do you want that done?

Maybe you only want to tell certain people, clients or customers if they ask or do you want to send a letter to everybody.

3. How would you want your business to be transferred?

  • Should it be transferred to a business partner or another employee?
  • If a family member, do you want it to be an inside transfer?
  • Do you want it to be an outside transfer? If it’s an outside transfer, the business continuity instructions should include a list of businesses or other serious potential buyers who you’ve talked with.

4. If you’re going to transfer your business, what is the desired minimum value that you want your family to receive?

5. What is that desired or bare minimum amount that you need to get for the value of the business in order to transition into retirement so that you have the financial resources that you need for the rest of your life or for the next phase of life?

It’s important to spell that out in the business continuity instructions in order to prevent your grieving spouse from accepting a low-ball offer.

6. Who’s going to be responsible for running the show at your company?

  • Who’s in charge of finance, operations and administration?

7. What happens to the employee benefit packages?

  • What happens to health insurance?
  • Do you want the 401k plan to terminate? It’s important, long-term, to address how you want those benefits handled. Especially if you have unique bonuses.
  • How do you want your family income stream to your family to continue and how will that be funded?

8. What might happen to the value of your business if you unexpectedly exit?

With just one owner, it’s extremely damaging to the value of the business and what you can get for the business after the owner dies or becomes disabled or is no longer able to continue running the business. Therefore, it’s important to address that because it might require you to look at purchasing additional insurance policies or coverage so that your family is still going to be taken care of and the business value won’t drop.

 Do You Have Questions About A Business Continuity Plan?

If you’re like most business owners and don’t have a business continuity plan, let’s talk! Click here to schedule your call >>> https://bit.ly/2y85PTq

THANKS FOR READING!

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Ashley Micciche of True North Retirement Advisors

Disclosure: 

The views outlined in this newsletter are those of True North Retirement Advisors (TNRA) and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.

Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for a given client or portfolio.

Investing in stocks includes numerous specific risks including the fluctuation of dividend, loss of entire principal and potential illiquidity of the investment in a declining market. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond and bond mutual fund values and yields will decline as interest rates rise and bonds are subject to availability and change in price.

Any questions regarding the applicability of any specific issue discussed above should be addressed with TNRA. All information, including that used to compile charts and/or tables, is obtained from sources believed to be reliable, but TNRA has not verified its accuracy and does not guarantee its reliability.

Moreover, you should not assume that any discussion or information contained in the newsletter serves as the receipt of, or as a substitute for, personalized investment advice from TNRA or from any other investment professional. To the extent that you have any questions regarding the applicability of any specific issue discussed above to your individual situation, you are encouraged to consult with TNRA or the professional advisor of your choosing. All information, including that used to compile charts, is obtained from sources believed to be reliable, but TNRA has not verified its accuracy and does not guarantee its reliability.

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