Brian Ray Livesay, a San Diego Financial Advisor says, “Unfortunately, many business owners never plan for the day the business will transfer ownership.”
Business involves continuous planning and revaluating. Decisions are made daily on how to best grow the business and generate more revenue. Having a succession plan in place will prevent selling a business at a rock bottom price if anything unfortunate should happen to the business owner or when the owner finally decides to retire.
A business continuation plan is a way to ensure a business continues its operations if the owner passes, becomes sick, or chooses to retire. The business continuation plan focuses on what it will take to keep the business up and running while the owner recovers from an illness or passes unexpectedly. Having funds available at this time is critical to avoiding a “fire sale” where the business is sold for basically whatever it can get as quickly as possible. The easiest way to get the funding for this type of plan is with life insurance – especially life insurance that has living benefit riders where the insured does not need to die for the policy to pay out a portion of the death benefit. The business can also set up investment accounts, money market accounts, CDs, or savings accounts but all these approaches take much more time to fund the accounts to the appropriate levels to continue the business operations for any significant period of time.
Another approach is to have a Buy-Sell Agreement in place. A Buy-Sell Agreement is a contractual obligation that establishes a specified buyer and selling price for the business. The sell is triggered by a qualifying incident such as illness, death, or retirement of the owner. The real key to any Buy-Sell agreement is to ensure the agreement is funded. Once again, life insurance is the easiest way to ensure the funds are available from the very first moment the agreement is in place.
Business is challenging and time consuming. It takes all the owner’s time and resources. It is oftentimes the business owner’s most valuable asset. This is why it is critical to establish a business continuation plan to ensure if something does happen to the owner their biggest asset and oftentimes life’s work is protected.
For more information visit Brian Ray Livesay, The Retirement Guardian’s San Diego Who Is Page at http://whois.sandiegoprofessionaljournal.com/brian-livesay-retirement-guardian/ in the San Diego Professional Journal.
Brian Ray Livesay – The Retirement Guardian
You may contact him at his office:
Livesay Capital Solutions Inc.
1761 Hotel Circle S. Ste 360
San Diego, CA 92108
Call (866) 726-0725 / (619) 281-8377
Or, visit his website: http://www.retireestaxgroup.com.