Exit Planning Tools for Business Owners

Steven Zeller

How a Business Owner Can Effectively Plan Their Exit

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Many business owners are finding it difficult to retire or transition out of their business due to a lack of exit planning together with a challenging economic environment. Shrinking cash flow, net income and credit have forced owners into fight-or-flight mode.

Several companies have successfully compensated by trying to expand sales and cutting costs. Many small to mid-sized companies, however, have experienced a drop in value, with no end in sight.

Owners are also entering the chapter in their life when exiting their business in one way or another is becoming more probable. Unfortunately, the business may not be currently worth what they need it to be to successfully exit.

Or what very often happens, is the business owner wakes up one morning, so to speak, and decides that they don’t want to run the business anymore and often decides the fate of the business without any careful planning.

The reality is that selling or exiting a business, is probably the single most important decision an owner will make. Instead of blindly hoping to sell their business “one day,” an alternative is for the business owners formulate a thoroughly planned exit strategy in order to sell or transfer their business for maximum value or compensation in the most tax-efficient method.

Creating an exit strategy, a process which takes three to five years, is the most significant step a business owner can make. All businesses are different and all business owners are different, therefore the exit strategy must be integrated with the owner’s objectives and requirements.

Is it a “lifestyle” business that produces revenue which does not need to be sold? Can the business be transferred over to a family member or key employee, or will it be sold to a third party? If a business owner is entering the stage in life when they need to be planning their exit, here is what they should be attentive to:

Define Objectives

Before you formulate your exit strategy, you must know when you want to leave your business, to whom you want to leave it to and how much money you hope to get from the transaction. Formal retirement planning and the creation of a life goal statement should be the first steps in this process.

Ascertain Value and Cash Flow

Regardless of who you are selling your business to, if your payout will come from future cash flow, then future cash flow is more important than current value. You can use many reliable valuation methods to estimate your business’ value. A formal valuation can come later.

Build Value

This step decreases the risk linked to owning your own business and helps improve the outlook for future growth. Setting your business up to operate without you, through improving the dedication of key employees, systematizing your business to run on autopilot, expanding market share, diversifying revenue sources, and growing corporate leadership, can significantly increase your businesses value.

Establish a Successor

The process of transferring your business takes time the sale will continue even after the deal is confirmed because future payouts are usually necessary. The transaction is completed once the agreed price is fully paid. Careful planning is required to successfully manage a sale to insiders who frequently are short of the necessary capital for a total cash buyout.

Conserve Wealth

Selling your business will create income for you, your family and the Internal Revenue Service. Cautious planning must be employed to diminish taxes, and preserve the accumulated wealth.

Exiting a business is probably the most important decision a business owner will make. They usually only get to do it one time, and all of the many years of hard work, risk and dedication is being realize with one event.

Regardless if an owner is transferring it to an insider or selling it to a third party, careful planning and consideration must be taken over an extended period of usually 3 to 5 years. It is a process that is driven by the owner and accompanied by a team of advisors that may include their financial advisor, accountant, business attorney, estate planning attorney, and so on.

It is also important that one of the advisors is thoroughly experienced with the process and can help the owner along through the required steps.

Steven Zeller is a Certified Business Exit Planner, Certified Financial Planner, Accredited Investment Fiduciary, and Co-Founder and President of Zeller Kern Wealth Advisors. He advises business owners with developing exit plans, increasing business value, employee retention, executive bonus plans, etc. He can be reached at szeller@zellerkern.com

What’s Your Purpose in Retirement?

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Retirement can be an exciting milestone. It’s also a major lifestyle change. Oftentimes, your daily workday tasks (professionally or if you run your own business) will likely no longer exist.

Transitioning into retirement for some is an easy process. Perhaps their profession is not their absolute passion, and they always had other pursuits and hobbies they are ready to explore once exiting from their day job. But for others, their profession or business is their passion. They put all their time and energy into it and are dedicated to their profession for many years. Now suddenly, retirement is on the horizon and work is coming to an end. Alternatively, some people have it in their blood to consistently be achieving something, striving to make an impact and difference.

Whichever the case for you, a meaningful life with purpose is a healthy human condition for life fulfillment and longevity. This perspective has been around for generations. Teddy Roosevelt wrote about it in his book, “The Strenuous Life,” written in 1899. To reference his perspective, here is a quote addressing how to live a fulfilling life:

“I wish to preach, not the doctrine of ignoble ease, but the doctrine of the strenuous life, the life of toil and effort, labor and strife; to preach that highest form of success which comes, not to the man who desires mere easy peace, but to the man who does not shrink from danger, from hardship, or bitter toil, and who out of these wins the splendid ultimate triumph. A life of slothful ease, a life of that peace which springs merely from lack either of desire or of power to strive after great things, is as little worthy of a nation as an individual.” – Theodore Roosevelt

Since we’re quoting Teddy Roosevelt about living a fulfilling life, here’s another excerpt from one of his writings titled “Into the Arena”:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows, in the end, the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

The reason I bring these quotes into this discussion of retirement is that it’s important to remember just because your time spent working up to this point is coming to an end, doesn’t mean you stop laboring or that you don’t need to put effort into new endeavors or into making a difference.

What Are You Going to Do in Retirement?

I was at a gathering recently and in a conversation with two close friends of mine were discussing retirement, and one said to the other, “It’s not whether you can retire, it’s ‘what are you going to do when you retire?’”. He’s right, in my opinion.

The book, “The Magic of Believing,” written by Claude M. Bristol in 1948, wrote of a man he knew: “One man I know who has many achievements to his credit, and who has passed the seventy mark, declared that most people fall by the wayside because they never start anything.

I make it a plan and have for years, to start something new – that is, new for me – at least once a week. It may be only the making of some simple gadget for use in the kitchen, an entirely new sales plan, or reading an unfamiliar book. I find in following this plan not only keeps my body and mind active but also puts to use a lot of imaginative qualities that otherwise might fall asleep and atrophy. This idea of a man retiring when he’s sixty is (in my option) a great mistake.

As soon as a man retires and quits being active mentally and physically, he’s on the way to his grave in short order. You have seen what happens to fire horses when they are retired. You know what happens to your automobile when you leave it outside unused and neglected: it starts to rust and is soon headed for the junkshop. Humans are the same: they deteriorate out or wither and die when they go on the shelf.”

We Need Purpose in Retirement

I have deliberately referenced writings published many, many years ago to point out that this dilemma is as old as time; the human struggle hasn’t changed. We all still need deep purpose in our lives and the ability to make a difference for ourselves and for others to have a fulfilling life. In the practice of helping business owners exit their business successfully, I have heard stories of owners when facing the day of finalizing the sale of their company, don’t show up for the signing. Why? Because all their self-identity and their purpose are in the company they started, grew, and made a great success. To them, parting from it represents an end to all of that and a loss of a sense of control. But exiting doesn’t have to be viewed as an end. But does take careful thought, reflection, consideration, planning, and time to develop a new purpose and consistent passions. For some this is simple, but for others, takes time and consideration. However, it’s a critical area to address. A person who says that finally I’ll have time to play golf will likely find that passion dissipates after a few months and begin to ask, “now what?”

Over the years, our firm has developed a client conversation exercise called “Purposeful Conversation.” Originally, it was developed from our practice of “family legacy development,” We developed our P.C. exercise as a systematized approach to have a deep discussion with a client on “what matters most” to them.

The exercise is broken into three sections: Concerns and Priorities, Commitments and Causes, and Pursuit of Happiness/Life Fulfillment. Each of these areas has nine to twelve potential subjects that a client can consider. We help determine, with the client, the subjects that are relevant and have a deep discussion about importance. This can help them visualize their future, determine their life’s passions during retirement, and help determine what matters most in life. We discuss what makes them happy, what will help them continue to grow, and what brings fulfillment and create a plan now to allow them to focus on and pursue what they desire later.

We also developed a customized workbook to help identify their individual and family values and tie it all into their changing lifestyle.

Pursure Passion in Retirement

Pursuing interests and passions can come in many forms and combinations. Once I took a Lyft from a downtown Denver hotel to the Denver Airport. The driver said that he had started a few tech companies in the past, sold them, and is now driving to meet and learn from other people. I also learned that he decided to learn all he could to master Neuro-Linguistics. This is the study of how verbal and non-verbal language is represented in the brain: that is, how and where our brains store our knowledge of the language that we speak, understand, read, and write. And what happens to our brains as we acquire that knowledge, and how we use it in our everyday lives. I describe it in detail because it’s quite involved! Nevertheless, this gentleman strived to master it and then apply it to his sales training and sales consulting. He told me he was, being hired by companies to facilitate training courses for their sales forces. Wow! Talk about pursuing something else with a passion. I am now connected with him on LinkedIn and learning from him.

You can make a new life in retirement, include whatever you desire, and in a way that brings you maximum fulfillment and meaning. Do whatever “floats your boat,” so to speak.

If you are approaching the runway to land into your retirement years, or the period of your life that transitions you from your profession to your passion, make sure to take time and plan for it. It will be well worth the effort.

I hope you find this article useful. If you have any questions on this subject, feel free to contact me at szeller@zellerkern.com.

Steven Zeller is a Certified Business Exit Planner, Certified Financial Planner, Accredited Investment Fiduciary, and Co-Founder and President of Zeller Kern Wealth Advisors. He advises business owners with developing exit plans, increasing business value, employee retention, executive bonus plans, etc. He can be reached at szeller@zellerkern.com

Utilizing a NING Trust as Part of a Business Exit Strategy

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The most commonly stated goals of an exit plan for a business owner are to exit their business on their terms, to receive the highest possible value (or their desired value), and to do so in the most tax efficient manner. It takes time to implement the process to accommodate those objectives. When a business owner rushes to sell their business many things can be overlooked including how to set up the exiting transaction in a way that minimizes taxation.

Particularly in California, state income taxes are excessive in relation to other states, especially compared to states that don’t have any income taxes. For 2020, the top tax bracket for California is 12.3%. Upon the sale of a valuable business, the realized gains can be substantial enough to hit this top tax bracket, especially if the business has a low cost basis. To put it into perspective; if a company is sold, realizing taxable proceeds of $12,000,000.00, the potential taxation in the state of California is approximately $1,476,000.00. That’s a significant amount but, if planned carefully, this potential taxation can be avoided.

Though it is not the only solution for a California business owner, a NING Trust (Nevada Incomplete Gift Non-Grantor Trust) is a tactic that be utilized to avoid California income taxes, if the right conditions are met.

What is a NING Trust?

A Nevada Incomplete Gift Non-Grantor Trust is an irrevocable trust designed to reduce or eliminate the potential State income tax for high income earners or on a significant capital gains on a sale of an asset, and the owner lives in a high income tax state. An irrevocable trust is often a trust to which the assets placed in it are no longer owned by the Grantor (Owner). Therefore, it has a third party trustee, and the trust and the assets in it are considered to be outside of the Grantor’s estate. However, because the NING trust is considered to be trust with an “incomplete” transfer status, it is still in the owner’s estate, but we will get into the benefits of that later. Because it is a Non-Grantor trust, the trust is the entity that pays the income taxes and not the Grantor, or owner of the assets. Because Nevada does not have a state income tax, a resident or a trust in Nevada would not owe income taxes.

A NING Trust is created under Nevada state laws. It is considered to be a “self-settled” trust, which means you are the creator and primary beneficiary of the trust. The NING trust would be utilized if you have a desire to receive distributions from this trust. Furthermore, you could benefit from a “self-settled” asset protection statue of this trust, which the state of Nevada recognizes. Although Nevada isn’t the only state to recognize this statute, Nevada is a very trust friendly state and is convenient for California business owners, which we’ll get into in a moment.

Estate Planning with a NING Trust

For estate planning purposes, it is important to realize that asset transfers into a NING trust is considered to be an “incomplete gift”. Because of this, the assets in a NING trust will be included in the asset owner’s estate and will receive a step up in costs basis at death, if the low cost basis assets are still existing in the trust. But, you will have the benefit of transferring assets into the trust and not be subject to gift taxes. Furthermore, keep in mind, that the NING trust is for income tax strategy purposes and not for estate planning to reduce an estate tax liability.
So here’s the catch. In order to take advantage of a NING trust, the business owner residing in California that is looking to sell their business should first purchase a home in Nevada or another state without income taxes and establish residence there. You will need to definitely work with a business transaction attorney or an estate planning attorney that is well versed in NING trusts.

Later, the shares of the corporation are placed into the NING trust (after it is established), which then the shares of the corporation are then sold to the buyer. The business owner, now a resident of Nevada, can eventually begin to take distributions from the NING trust. You will need to work with a C.P.A. or tax attorney, but some say that after a year or so after the sale, the Grantor can begin to take distributions from the trust.

NING trusts can only own intangible assets, so shares of a corporation or an investment account. But that is okay in this instance, because the shares are sold and then placed into an investment portfolio to continue to grow.

Maintaining Non-Grantor Status

In order for the trust to maintain a Non-Grantor status or not violate the Grantor trust rules (which would make distributions taxable), the Grantor needs to exercise Powers of Appointment or Non-General Powers of Appointment. This means you retain the power to appoint anyone in the world except yourself, your estate, or creditors of your estate. For this discussion, we will refer to the “Inter Vivos Powers of appointment”, or powers during life. In this situation, distributions must be facilitated by a committee of adverse appointees. Second, the distributions need to be made in a non-fiduciary capacity and based on HEMS (Health, Education, Maintenance, and Support). Adverse committee members may include siblings, children, or other relatives that may be beneficiaries. There are many more nuances to these rules, which we won’t get into for sake of time. Besides, an expert attorney will explain all you need to know.

The bottom line is, this trust has a lot of rules and must be carefully written and set up. But it is feasible.

To Summarize, the trust needs to:
1. Be self-settled to give the grantor the ability to receive distributions.
2. Be a non-grantor trust so that the grantor won’t be taxed on the trust income at the rates of their home state.
3. Ensure the grantor be given a non-general power of appointment to direct disposition of the trust.
4. Furthermore, the transfer of the business to the trust would have to be an incomplete gift, includible in the grantor’s estate at their death.
(source: Save State Income Taxes Using a Nevada Incomplete Gift Non-Grantor Trust; Steven J. Oshins, Esq., AEP & Brian J. Simmons, CFP)

There are other solutions other than a NING trust to accommodate a business exit planning strategy. It all depends on the business owner’s situation, and what state they live in or operate the business in.

If you are interested in learning more about these tactics, or would like to see what solution is best for your exit planning needs, feel free to contact me by email: szeller@zellerkern.com.

Steven Zeller is a Certified Business Exit Planner, Certified Financial Planner, Accredited Investment Fiduciary, and Co-Founder and President of Zeller Kern Wealth Advisors. He advises business owners with developing exit plans, increasing business value, employee retention, executive bonus plans, etc. He can be reached at szeller@zellerkern.com

Preserving Family Wealth is a Generational Effort

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Wealth within a family can be a double-edged sword. It can serve as an incredible resource to benefit its family members, but it can also be destructive and divisive. Destructive in the sense that if not properly tended to and respected, wealth can destroy the purpose and outcomes of individual family members, and divisive in the sense that it can damage the bond between family members and cause a splintering of the family.

Wealth and the handling of wealth is a topic that has been discussed or written about throughout the ages, as it is mentioned in both the Old Testament and the Gospels within in the parables of Jesus. Yet often, families don’t properly plan, develop, and practice the preservation and utilization of their wealth in a way that produces favorable outcomes and continues over the generations. The reality that families face is that just because they have addressed the accumulated tangible assets with a planned strategy and structure to transfer those assets, it does not assure that those assets will last and more importantly, promote the growth and well-being of the individual family members, and promote family unity.

So how does a family address this topic? A good place to start is to change the way wealth is viewed and is approached. First, family wealth is capital, which equals potential (Family Wealth = Capital = Potential). That potential can have a positive effect or have a negative effect. Secondly, family wealth comes in multiple forms – Financial capital, human capital, intellectual capital, and spiritual capital. Wealth in a family means more than just money, assets and material resources, it includes all of the other things such as family heritage, reputation, knowledge, education, passions, purpose, relationships, achievements, personal growth, and values. In fact, the other forms of wealth that I just mentioned are arguably more important to preserve and grow than the tangible form of wealth, because without nurturing and expanding the intangible forms of wealth, the tangible wealth is not likely to survive and breaking family harmony as a consequence. The emotional bonds, unity and harmony of the family members are some of the more powerful components that are critical for preserving family wealth long-term.

Within family unity and harmony lies the development of trust, respect, and communication. These components should be developed and strengthened before financial capital is transferred and deployed. We will discuss that later.

Discussing the Four Forms of Wealth

The forms of family wealth that I mentioned are somewhat subjective but are important to realize and work to develop, grow and protect. Strengthening all 4 forms of family wealth promotes purpose, personal growth, happiness, and well-being. Furthermore, the legacy of this wealth involves every family member and spans over several generations.

Financial Capital – Financial capital consists of the tangibles – Investments, savings, bank accounts, real estate, businesses, precious metals, collectibles etc. – The movable and immovable assets that the family owns. Financial capital can provide a powerful tool with which to promote the growth of the family’s human, intellectual, and spiritual capital.

Human Capital – Human Capital is the most important capital. It is the members of the family and their physical and emotional well-being and self-sufficiency. It’s their ability to pursue happiness, having a higher purpose than themselves, their ability to make a positive impact on their community, and the centeredness of maintaining a strong family. Not only is it vitally important to focus on the strength and growth of this capital long-term, the family needs to work, communicate, and cooperate with each other as a team to help assure that everyone is flourishing to the best of their ability, and work towards common goals.

Intellectual Capital – The strength of a family rests on what it knows. The intellectual capital is the knowledge life experiences and wisdom of each of the family members. gaining knowledge, applying knowledge, and other skill sets to preserve the wealth, and apply it in ways that is conducive for the family and well-being of family members. It is also the competencies of each of the family members. Building a strong foundation of intellectual capital will help drive individual purpose, skills, and the applicable knowledge to preserve and respect the financial capital.

Spiritual Capital – As sad as it is, this subject has become controversial within our society as it becomes more secularized. But the spiritual capital ties in with the happiness, well-being and purpose of each family member, in that if they have a strong spiritual foundation, they have a higher power to live for, go to, and from a meaningful perspective, make a positive difference in the world for the sake and love for mankind through God.

Long Term Success of the Family Wealth

The Importance of Family Harmony

Family unity and harmony are vital for the survival of family wealth. The proactive building of trust and communication needs to begin early on as a family. Why? Because it doesn’t happen overnight and requires working as a team and developing the family bonds that are trusting, compassionate, and cohesive. According to some studies, 70% of estate transitions fail and to which the wealth vanishes. Within the 70% failure rate, 60% of that failure rate was due to a breakdown of trust and communication; 25% was due to the failure to prepare heirs; 10% was due to not having a family mission statement; 5% was deemed to be for other reasons.

Because of the high failure rate, due to the breakdown of trust and communication, stresses the importance of the family focusing on it and making a consistent effort to strengthen it. Hence, proactively preparing family members involves resolving the breakdowns in communication and trust. It also requires them to work together to establish a family vision and mission statement, aligning those statements with the financial capital, identifying family values, develop roles for each family member, developing performance and quality standards, and work towards family governance involving the whole family.

There is a process that a family can go through starting with the wealth accumulators, or the first generation of wealth. This journey consists of several tools including a family retreat that involves the first generation or the parents that accumulated the wealth. Later, the other generations are brought into the fold with the beginning of family meetings. From there, the building of communication, trust, common causes, the establishment of values, the fine-tuning of the vision and mission statement, etc. are pursued. When this is thoroughly completed, the family can then work towards establishing roles for each individual, develop leadership skills, and develop family governance.

Ultimately, this is the creation of a family legacy, and as I mentioned in the title of this article, it is a multi-generational process and effort. It also is likely that the family will need professionals to help them through the process, which our firm can provide.

Steven Zeller is a Certified Business Exit Planner, Certified Financial Planner, Accredited Investment Fiduciary, and Co-Founder and President of Zeller Kern Wealth Advisors. He advises business owners with developing exit plans, increasing business value, employee retention, executive bonus plans, etc. He can be reached at szeller@zellerkern.com or complete an Exit Readiness Assessment for yourself now.

Protect Your Business with A Solid Continuity Plan

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The Need For A Solid Continuity Plan

A great characteristic of successful business owners is that they are optimistic people and will do what it takes to protect their business. They have a can-do attitude, setting their goals high, taking risks, hiring the right people, constantly striving to improve the delivery of their service or product, with a constant drive to build their entity into one of great significance.

As a result, building a successful company may give the owner great pride in their achievements and a strong sense of identity. That is normal human behavior. But because of that, the thought of an event that causes the owner to leave the business due to death or a disability is often never planned for and is overlooked. If such an event were to occur, it would not only jeopardize the value or even the survival of the business itself, especially if the business is heavily reliant on the owner or a key partner, but it also jeopardizes the future career paths of key employees and others, and leave customers scrambling to find somewhere else to go.

What Does It Take To Protect Your Business?

One thing is often on the minds of owners and advisors; how the family is taken care of through an unexpected death or disability. However, business continuity planning goes much further than that. A solid business continuity plan includes agreements, procedures, employee incentives, and safeguards that are put into place to help enable the business entity and all of its successors. This includes all key employees, vendors, operations, procedures, and customers. It helps the business continue on a successful path, with as little interruption as possible, if the owner/s is no longer present.

For instance, who will fill the slot of Chief Executive or Chief Operating Officer? Does the remaining management have a plan? Do they have financial resources available to search and bring in somebody from the outside to fill that position? Should they begin, now, to groom key employees for that role? How will the key vendors, creditors, and customers be handled? Will supplementary training need to take place? What will you tell the customers and the community to maintain confidence in the company during an unexpected death or disability? What plan will you put in place to entice the key employees to stay around and ensure the internal integrity of operations?

The reality within the marketplace is, if the business is left paralyzed and vulnerable, they risk losing key customers, creditors, and key employees who may be quickly recruited by competitors.

The Elements of a Solid Continuity Plan

The good news is that building a solid continuity plan is a required step within the exit planning process. It helps to build the value and marketability of the organization.

There are many areas that a continuity plan addresses and help protect your business. It includes the creation of a Buy-Sell Agreement, or amending or replacing one; the disposition of ownership interest, which is done through estate planning documents; insurance to fund the Buy-Sell Agreement; a management continuity reward program; retaining key employees after death or disability; a stay bonus plan; a process for terminating personal guarantees for business obligations, business continuity instructions; and a Buy-Back agreement for minority owners. There are other potential areas to address, but these are the likely critical areas.

Key Documentation

Buy-Sell Agreement – This document is created to summarize the terms of the written agreement that will govern the ownership transfer and ownership rights aspects of the ownership interest of the primary owner/s and other members of the controlling interest group. This document also covers the issues related to the rights and responsibilities of the parties to the agreement.

Disposition of Ownership Interest Through Estate Planning Documents – Estate Planning documents summarize the intentions and issues that are most important to the owner if he/she dies while holding the ownership interest in the company. This is carried over into the continuity plan and is created within the personal estate planning documents.

Insurance to Fund A Buy-Sell Agreement – The purpose of this exercise is to recommend and select the appropriate type of life and disability insurance related to the purchase/sale of the owner’s interest in the company. Proceeds from these policies are used to purchase the ownership interest.

Management Continuity Reward Program – This is to address the benefits that the owner intends to provide to the individuals who take over the management responsibilities if the owner should die or become disabled, and is unable to perform the regular responsibilities.

Retaining Key Employees After Death or Disability – This is the section of the plan that addresses the steps to retain key employees. This is not intended to include incentive and reward planning for key employees, which is more properly addressed in a separate component of the overall planning. Instead, attention is given to the particular issues relevant to the key employee retention when a majority or controlling owner is unexpectedly absent from the company. This section is intended to assist the successor management staff. It also allows them to concentrate on the continued success of the company and protect your business.

Stay Bonus Plan – Develop a written agreement that would become effective upon the owner’s death or disability. The Stay Bonus Plan acknowledges the indispensable employees remaining with the company should such an event occur. The plan provides confidence and support to specific employees who choose to remain with the company and provides substantial financial reward for them doing so.

Terminating Personal Guarantees for Business Obligations – This is a stipulation of steps to be taken to protect the company if the owner’s personal financial resources are no longer available to support the financial activities of the business. In the event of death or disability, the company relationships may require that the business demonstrate financial stability to continue their relationship.

Business Continuity Instructions – Business continuity instructions are written instructions that are completed, signed, and stored with other important personal documents related to the owner’s death or disability.

Buy-Back Agreement for Minority Owners – The purpose of developing this agreement is to state the situations in which an employee owner’s interest will be purchased by you or the company in specific situations that may arise. It also governs the employee’s ownership interest while he or she is an owner. It addresses certain rights and responsibilities associated with the ownership status and other terms related to ownership.

 

Work Flow Diagram

Over the years my staff and I have developed a work flow diagram to help the owner understand how we can approach the development of a Business Continuity Plan. Although, every situation is different, it gives you a general idea of how it may come together.

Protect Your Business

The bottom line is, a solid Continuity Plan is critical for you, as a business owner, to develop and maintain, to help ensure that your business, which you and your staff have worked so hard to build, maintains its integrity and success if something should happen to you.

Steven Zeller is a Certified Business Exit Planner, Certified Financial Planner, Accredited Investment Fiduciary, and Co-Founder and President of Zeller Kern Wealth Advisors. He advises business owners and develops exit plans, increases business value, employee retention, executive bonus plans, etc. He can be reached at szeller@zellerkern.com