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with his wife. When they got home, his wife asked for a divorce. Both spouses are business owners, and he’s involved in multiple businesses, some worth upward of eight figures. There are multiple shareholders involved, and without a provision for it in a succession plan, his shares are up for grabs. So many business owners are risk averse when it comes to their money. They choose safe investments for their portfolio. So why would they roll the dice with their whole business? It’s mind boggling to me that any small business owner is putting off creating this plan. Sure, the process can be expensive, but it’s a hell of a lot less expensive than dealing with the fallout of not having one. If you don’t get this figured out while you’re healthy and well, rather than in the middle of a divorce or fighting with your business partners, you are setting yourself up for a struggle. Imagine you discover an owner is embezzling money, and you kick them out of the company. This owner obviously shouldn’t get their full stock share, but without provisions that are specified in a business succession plan, there might not be any way to stop them. Every small business should have a plan for what happens with the company's ownership and management when the current owners and executives leave the company. Ideally, after the business succession plan is created, each owner should also have a personal estate plan in place so there’s clarity regarding who the company deals with if an owner dies or becomes incapacitated. All our Access members are at a huge advantage here, as they get serious savings when they create their business succession plans. Being part of the club means you have on-demand access to our legal team, so when little changes come up or you need to do your personal estate plan, it’s way more cost-effective and efficient. I urge you to create your business succession plan before it’s too late. It will take a little time and some money, but it will save you — and potentially your business — in the long run. – Scott Reib
WHY ARE YOU ROLLING THE DICE WITH YOUR BUSINESS? THE NO. 1 MISTAKE I SEE BUSINESS OWNERS MAKING
If you have young kids or spend any time around children in general, you know they can be prone to making the same mistake over and over again. Their young brains are dominated by feelings, not facts, so they don’t always respond rationally to negative situations.
A toddler’s reactionary behavior is excusable because their brains are still developing and adapting.
What’s not excusable is a full-grown business owner making repeated mistakes, yet that’s exactly what I see business owners do time and time again when they fail to make a succession plan. If you’re a single owner of a business and don’t have a business succession plan, it’s a problem. It’s an even bigger, messier problem for multiple-owner companies that don’t have a plan. Everything you’ve built is at risk when you or another owner dies, becomes incapacitated, or experiences a divorce.
Last month, I got a call from a client in this nightmare situation. He’d just gotten back from an international trip
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