One of the biggest assets most business owners have to support themselves and their loved ones is their business. We know they work hard to keep their business running and want to ensure they are doing everything they can to protect it. However, one thing we have seen is that most owners don't think about planning for the continuity and succession of their business. In other words, we see a lack of plans in place for how the business will operate, and who will operate it, if something were to happen to the owner, such as incapacitation or death. Since a business is often a very significant asset of the owner, and a major source of income, that's a large problem.
Business owners are often optimistic, and therefore it can be easy to think that nothing bad can happen to them. The reality is, anything can happen, and emergencies are not predictable. If an emergency does happen, it's critical to have a plan in place for how your business will continue to operate. Failing to have plans in place detailing who will step in to continue operating or overseeing the business will make it much harder on your family as well as the employees who rely on the company to support their family, and, of course, a lack of planning can impact the company's relationship with its customers.
When no planning has taken place, and no one has documented, legal authority to manage the business, it is likely that a court process will be required in which someone can be appointed to oversee the business or the affairs of the owner. This not only takes time, but it also increases the risk of losing money as a result of lack of production from the business, which, in turn, can make it hard for your family to pay for their bills and expenses and for the business to generate revenue and continue operations successfully. It's easy to see that if the company is essentially dormant for some period of time that employees may leave and find work elsewhere, and customers may turn to other vendors to meet their needs. The good news is that these problems can be minimized, or avoided, with good continuity and succession planning.
Good planning can help ensure that key people are given legal authority to step in and continue operating the business when the owner can't manage it.
It's important to ensure that there is someone that you trust who has documented, legal authority to step into your place if something were to happen to you, and you could no longer manage the business yourself. Importantly, the right people need documented authority to be able to handle basic day to day business operations including:
- Signing checks
- Running payroll
- Signing contracts
- Managing staff
- Making key business decisions overall.
Another plus for doing your business's continuity plan is that the business stays out of the probate court process and operations are handled by the family, or other key persons, without the potentially lengthy delays and hassles of the probate process, whether because a conservator must be appointed due to the owner's incapacity, or the company is caught up in an estate probate case after the owner died.
There are a multitude of things to think about when it comes to how to proceed with planning for a business. We understand that this is not a simple thing to think about, but we are here to help field any next steps in the process. Contact us at 678-344-5342 to schedule a consultation to discuss the planning needs for your business. And, if you have any questions about estate planning in Georgia, you can download our free guide here, no strings attached.