As an advisor to many families, the commencement of a succession plan usually arises because of some outside event that happens.  The well planned family does not necessarily wait until this event happens, be it divorce, death or a health issue.  Given enough  time and planning, a succession plan can be put into place, so that if one of the dire events above transpires, then the family and the business are prepared.

We all need a contingency plan.

First, I believe that it is my job to help the owner of a business think outside of the box. Accordingly, in our semi annual meetings, we not only speak about the last year of financial events, tax and compensation planning.  These topics are all backwards looking.  We look forward and try to plan 3-10 years out and have discussions around what this would look like.

It is my obligation and duty as advisor to help steer my clients, sometimes into choppy waters, and have them look forward.  On the rare time, they are receptive to these “new” ideas and many other times, resistant.  Nevertheless, each year, I bring up, as an appetizer and food for thought, some issues for consideration on succession.   Here are some of the hard questions:

1. if something happened to you so that you could not operate the business, who would run the business?

2. do you key 5-10 customers have more than one point of contact within the firm?

3. are you personally synonomous with the success of the company or can it stand on its own?

4. how have you involved your family members in the business and what do they know about the business?

5. does your spouse know anything about the business?  does he / she know who to call if something happens to you?

6. do you have a death file?

This last point, I will expound on more in a future blog entry.

Learn, think, apply!