This is an excerpt from the Appendix of the book Value and Protect. One of the main drivers for writing the book is to help make Business Value Protection Planning simpler and easier. Here is a good foundation on which to build a succession plan for your business. For a copy of the chart E Mail me at – Thank you.

“Plan for the worst-case scenario to make it as good as possible.” – Ray Dalio

Succession Planning

Succession Planning is preparing for the day you leave your business. It does not have to be a frustrating process. If there is a structure to the process then you can tell your advisors what you want and they will design the plan and the funding for you.

Let’s start with some basics. Someday you or your shareholder partners will leave the business. There are six ways:

  1. Death
  2. Disability
  3. Divorce
  4. Voluntary Retirement/Separation
  5. Involuntary Retirement/Separation
  6. Bankruptcy

Business Value Protection Planning focuses on Death, Disability & Voluntary Retirement. Your succession plan document should address all six. Investors and your bankers/creditors will want to know they are protected in these documents and may even require them.

Using death as an example here are the questions we ask.

  1. If you die what do you want to happen to your business?
  2. How is it documented?
  3. How is it funded?
  4. If it happened tomorrow how would your death impact the Company Operations?

If someone else owns the business with you we will ask the question from the perspective of the other owner’s death?

We then repeat these questions for the five other ways you might leave your business.

Succession Planning starting from a blank sheet of paper is difficult. We have found this one chart goes a long way to creating clarity for you the owner and your partners. You don’t need to have all the answers and your advisors should be prepared to give you insights and guidance.

Use this chart to communicate your succession plan to your family and to your key stakeholders. It is easier than using a detailed document when having these discussions. Eventually this chart is modified and expanded to be a summary of your succession plan.

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