Make Sure Your Buy Sell Agreement Addresses Partner Disputes
Lets spend another minute on the buy-sell agreement. As discussed, death is insurable. More complex is how feuding partners can separate. Deal with this when you are starting your partnership. If you cannot work out a fallback agreement then, think what it will be like if the business is not doing well and one of you wants to leave. Don’t always assume your partner will be the one to leave. Few former owners we talked to thought they would voluntarily leave their business when they started it.
Thursday, January 27, 2005
Tuesday, January 25, 2005
Prepare a Strategic Succession and Exit Plan
Ideally you should begin planning your exit five years before you leave your business. This gives you plenty of time to determine what you want to accomplish, make adjustments and implement the plan.
Of course if you are like most people knowing when you are five years from leaving your business may be problematic in itself. For that reason we believe every business owner should carry on some level of exit planning.
If you are too young to work on an exit plan your may want to call it a succession plan. We would combine that with a buy sell agreement if you have partners. Insure your death to provide for you spouse, perhaps with an insurance trust. If you desire or need to, insure your death to pay your bills and you have an effective plan succession plan for many small businesses. More difficult is disability. This can be insured but the price can be significant. We would recommend you seriously consider disability insurance if your health allows it.
If you have, partners make sure you have a buy-sell agreement. Again, death is easy for most people because of the reasonable cost of term life insurance. More complex is how feuding partners can separate. Deal with this when you are starting. If you cannot work out a fall-back agreement then, think what it will be like if the business is not doing well and one of you wants to leave. Don’t always assume it will be your partner wanting to leave either. Few owners we talked to thought they would voluntarily leave their business when they started it.
Address these matters at all times in your business life. We will continue with this topic in a future post. Thanks now.
www.successfulexits.com
Ideally you should begin planning your exit five years before you leave your business. This gives you plenty of time to determine what you want to accomplish, make adjustments and implement the plan.
Of course if you are like most people knowing when you are five years from leaving your business may be problematic in itself. For that reason we believe every business owner should carry on some level of exit planning.
If you are too young to work on an exit plan your may want to call it a succession plan. We would combine that with a buy sell agreement if you have partners. Insure your death to provide for you spouse, perhaps with an insurance trust. If you desire or need to, insure your death to pay your bills and you have an effective plan succession plan for many small businesses. More difficult is disability. This can be insured but the price can be significant. We would recommend you seriously consider disability insurance if your health allows it.
If you have, partners make sure you have a buy-sell agreement. Again, death is easy for most people because of the reasonable cost of term life insurance. More complex is how feuding partners can separate. Deal with this when you are starting. If you cannot work out a fall-back agreement then, think what it will be like if the business is not doing well and one of you wants to leave. Don’t always assume it will be your partner wanting to leave either. Few owners we talked to thought they would voluntarily leave their business when they started it.
Address these matters at all times in your business life. We will continue with this topic in a future post. Thanks now.
www.successfulexits.com
Monday, January 17, 2005
Take a Vacation and Improve Your Business
Taking a vacation will force you to improve your business. Yes, basking in the warm sun, while sipping an ice cold margarita, will do more good for your business than frantically racing through another day.
By taking a vacation you will improve your business three ways:
1. You will find ways to delegate routine tasks. You will eliminate some very mundane tasks. When you return continue on with this new found delegation. It will provide you with more time to do important work. Remember the receptionist and mail clerk have many urgent tasks and no control of your time. As a business owner you must find time for important tasks like planning that will grow the business.
2. You will clear your mind. With a clear mind you will be able to make normal decisions much more rapidly. You will also find yourself making better decisions. Surely you have experienced being so busy that you can hardly make simple decisions like ordering off a menu.
3. By not thinking often major life decisions or major business answers will just come to you. Deciding to add a new product line, or hire a key executive or other major decision may do more for your overall efficiency than days of routine decisions.
Remember, take a vacation and improve your business by improving your delegation skills, relaxing so you make better decisions, and having the answers to major decisions just appear.
For more go to www.successfulexits.com
Taking a vacation will force you to improve your business. Yes, basking in the warm sun, while sipping an ice cold margarita, will do more good for your business than frantically racing through another day.
By taking a vacation you will improve your business three ways:
1. You will find ways to delegate routine tasks. You will eliminate some very mundane tasks. When you return continue on with this new found delegation. It will provide you with more time to do important work. Remember the receptionist and mail clerk have many urgent tasks and no control of your time. As a business owner you must find time for important tasks like planning that will grow the business.
2. You will clear your mind. With a clear mind you will be able to make normal decisions much more rapidly. You will also find yourself making better decisions. Surely you have experienced being so busy that you can hardly make simple decisions like ordering off a menu.
3. By not thinking often major life decisions or major business answers will just come to you. Deciding to add a new product line, or hire a key executive or other major decision may do more for your overall efficiency than days of routine decisions.
Remember, take a vacation and improve your business by improving your delegation skills, relaxing so you make better decisions, and having the answers to major decisions just appear.
For more go to www.successfulexits.com
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