Year-End Action: Sole Owners Should Review Business Continuity Instructions
The end of each year is an ideal time for a sole business owner to review and update their Business Continuity Instructions. An owner’s death or permanent incapacity often leads to the failure of a business, resulting in very difficult consequences for the family, employees, and customers. Written and distributed Business Continuity Instructions will provide those left behind with essential short-term and long-term instructions regarding the continuance of the business.
Very practical short-term information needed on day one, such as…
Bank account information
Insurance coverage and location of policies
Location of spare keys, security codes, and passwords
Who has the authority to make immediate decisions? Operations? Finance? Administration? Etc.?
What Key Advisors need to be contacted and engaged?
Long-term information about the continuance of the business, such as…
Who comprises the Board of Directors (if applicable)?
How do you want the business transferred? Sale to third-party? Sale to family? Sale to insiders? Liquidated?
Do you have a current estate plan?
Is there long-term debt and/or lines of credit that you’ve personally guaranteed?
What are the sources of working capital during the time of transition?
What agreements are in place with key employees? Employment Agreements? Stay Bonuses?
Having data like the above current and readily available for those left to continue the business could be the difference between the business continuing for as long as needed and being liquidated at a fire-sale price.
As we approach the end of this year and the start of 2022, we suggest investing time in creating or modifying your written instructions. Contact us today for a free copy of our Business Continuity Instructions fillable PDF.
