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Succession Planning We asked-You answered!
In a recent blog about succession planning, we asked that you share your stories with us. That way we can all learn from each other’s experiences. In this post we thought it would be helpful to share one of those responses.
This story comes from Bryan Morris, a business owner in Springfield, MO. Bryan’s company was originally started by his father whom he deemed “a big time small-town cop” and local hero who had also served in several branches of the armed forces. Bryan’s father started the security company from scratch and after a few years, Bryan joined the business.
Although Mr. Morris was by no means an “elderly” man and was in seemingly good health, he and Bryan and some extended family members thought it would be best to have a plan in place in the event that anything ever happened to him. So, they made four contacts; their attorney, accountant, insurance agent and banker.
- Their attorney helped them to establish a buy/sell agreement defining ownership currently and in the event of death of any owners.
- Their accountant worked through all of the debts and assets of the business to provide a clear game plan on how they would move through several stages of the business then and into the future.
- Their insurance agent put together life insurance policies that would ensure, in the event of any loss of life, there would be enough coverage so the company could move forward completely debt free.
- Their banker knew the value of the business and the amount of debt that the business carried and became a trusted partner.
When, tragically, Bryan’s father passed suddenly and unexpectedly, he knew he had four phone calls to make. In very short order, his “team” had everything in motion and were able to handle all of the necessary steps so that Bryan could keep the business and pay off any debts that it had incurred.
Bryan stated there were some real nuggets of wisdom that he gained going through this process… “First, if you have only an informal partnership in place, and there is a death, you surely don’t want to become partners with the surviving spouse’s attorney!” The buy/sell agreement covered them as that concern came to fruition.
“It is critical to maintain a good relationship with your banker. Bankers don’t like surprises!” he stated. “Shortly after Dad’s passing, I wanted to give a Christmas bonus to our employees as many of them had been with us for several years and this was one of Dad’s wishes. Our banker knew that our insurance check was on the way and he helped us out so that I could give bonuses that year.”
Bryan is still running the business today and is making succession plans for whomever is going to take the reigns next.
We wish him much continued success!
Sadly, we still hear other stories about business owners passing and leaving a puzzle for their family to figure out. Part of the grieving process should NOT include trying to weed through a maze of your business. You’ve heard us recommend having an exit strategy, well this is part of it! Let your succession plan be your admired legacy!
Have a story you’d like to share? Email us a firstname.lastname@example.org.