Business Continuity
Step 1 - Identify Owner Objectives
The most common objective in this Component is that an owner wants to be sure that he or she will receive full
value for his or her ownership interest if certain events occur (such as death, disability or retirement). At the
same time, each owner also wants to pay fair value if he or she is required to purchase the ownership of a co-owner.
Another objective might be that the business will stand on its own, be financially independent from the owner and
continue to thrive after he or she is gone.
Step 2 - Identify Business and Professional Financial Resources
Following the identification of objectives, it is critical to determine: current business value, a method for
calculating future business value, projected future cash flow from the business and the business owner's non-business
financial resources. Owner objectives are considered in light of this financial information to set expectations in
business continuity planning and to verify that a plan is reasonable.
Component
Business continuity planning encompasses a wide range of consequences that may follow the departure of a majority
owner or a member of a controlling owner group (because of death, disability, retirement or termination). This
Component frequently keeps business owners awake at night wondering what will happen to their ownership interest and
to the business itself. Business continuity planning protects an owner’s right to receive payment for his or her
interest, provides certainty about what he or she may be required to pay for the interest of a co-owner and supports
the business after a departure so that it can continue to thrive.
Implementation and Follow Through
The business owner and his or her advisors work together to design and finalize the Recommendations that will
drive the owner toward reaching his or her objectives. Once Recommendation details and decisions are complete, an
organized and systematic implementation of each Recommendation follows. Finally, they focus their attention on the
next Component that will fit into the owner’s comprehensive Exit Plan.
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What Business owners typically say…
"My partner and I have always had an understanding about what we would do if one of us dies, but I'm not comfortable with that anymore."
"My spouse doesn't even know where I keep the keys to the building, much less what to do with the business if I die or am incapacitated."
"My family and I rely on the business for a significant part of our income, so I need to protect that income stream if something happens to me." |
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