Business Planning
Business Planning
Corporations and partnerships are increasingly focused on diligence, operational improvements, and infrastructure — but many overlook the potential disruption and financial consequences that come with insufficient risk-related strategies. Almost 70% of family businesses don’t survive through the second generation, and the gap between recognizing the need for business protection and actually having a plan in place remains significant.
We work with business owners, partners, and their advisors to identify exposures, structure solutions, and ensure that what you’ve built is protected against the unexpected.
Business Planning Strategies and Solutions:
Many businesses have limited strategies for the tax, legal, and obligation-related risks that can surface without warning:Partnership buyout obligations and liabilities
Buy-Sell Funding Analysis, Dynasty Buy-Sell Agreements and Key Person
Capital payouts and settlement of a partner’s share to their estate
Tax year closure triggered by a partner’s death or departure
Trust structures that may conflict with partnership agreements
Contradictions within LLC operating provisions
Rights of executors, administrators, spouses, or other representatives to exercise a deceased or incapacitated member’s full rights under the operating agreement
Business Succession
A business succession plan is as vital to the long-term health of a company as the business plan that launched it. Yet most owners spend their careers focused on creating, supporting, and growing the business — and the general thought on succession planning is “it will take too much time” or “I haven’t thought about this yet.”
Succession planning means identifying the key factors that make your business successful — management, employees, customer relationships, owner involvement — and creating a blueprint that supports those factors when the business transitions from one owner to the next. The most popular succession strategy remains transferring the business to family members, but confidence in those plans requires more than intention. It requires structure.
What would happen to your company if the best in your organization became disabled, died or had a chronic illness?
Key Person
These individuals are typically the key drivers of innovation and leadership. The simple answer is the business would suffer. Sales-heavy, family, private equity, and financial firms are particularly vulnerable, as the nature of these businesses often means there are deeply personal relationships with clients that can’t easily be replaced.
The permanent or temporary loss of a key person can lead to the loss of current and future business, the deterioration of relationships with important contacts, and inevitable workflow disruption. Uncertainty ripples through investments, and corporate capital gets redirected toward finding a replacement. The costs — due to any cause — can put a company into chaos, both operationally and financially.
Hedging with insurance will flow much-needed cash back to your impacted business and investors, regardless of the reason for the loss. Although premium payments aren’t tax-deductible, the benefits are paid tax-free. There may be tax implications associated with the funding, ownership, and benefit payment of a key person insurance policy, as well as additional complexities in product design and contract structuring. Ensuring these strategies are professional, compliant, and cost-effective is paramount.