Archive for December 31st, 2010
Business Survival – Planning for a Hard Day
December 31st, 2010
There is nothing worse for a company, then the owner suddenly died … especially when your company.
Todd Carpenter, owner of 55 years, only a successful construction company. Todd his company hoped to sell to third in the next 18 months.
Shortly after his death, the key employees left the company for jobs with more certain futures. They feared that the company can not continue without leadership of Todd and personal financial support.
Todd Bank became so uneasy and decided to call in the debts of his company, Todd had personally guaranteed the debt.
In a few weeks after the death of Todd, his key managers have disappeared, his company in default on a number of contracts, revenues fell, customers leave the ship and all possibilities of alternative financing quickly disappeared.
As you can see, planning for business continuity is vital to your business. (Do not think your legacy will be the announcement of your company to escape their creditors.)
Fortunately, there are a number of methods some owners can implement today to help prevent the collapse of the type of business that business experience Todd Carpenter.
In the first place for key employees on board after your death, providing the goods, perhaps by an agreement of purchase and sale or provide additional compensation or key employees remain with the company continues to operate. As an added incentive, these employees a substantial premium (called a “stay bonus”) to stay with the company, one that can be funded with insurance who can be consulted in the case of your death.
Second, alert your bank to your succession plan.
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