On many occasions during my career, I have had the opportunity to visit with business owners across our beautiful Valley, our mesmerizing State of Arizona and beyond.
Quite often our conversations explore the topic of buy-sell planning. This is an extremely important topic for all business owners, especially baby boomers who are thinking about their business transition and succession planning.
Why is this so important to baby boomer business owners?
Quite simply, if something goes wrong, it can disrupt their …
- Business Partners
- and just about every relationship both the owner and the business have.
While this is a challenging planning issue if there is a single owner or three or more owners, there are unique challenges in the two owner business.
Work with My Spouse
Once a business owner tells me they have a single partner and they own the business 50/50, I ask if they are both married. Many times, both partners are. I always ask this question next:
“Do you really want to be in business with your shareholder’s surviving spouse,
who would have equal ownership and equal say for the business?”
Almost every time I ask that question, one or both business partners look each other in the eye and begin to adjust their position in their chair.
Because in an instant, their mental image went from this:
… to this:
… to this:
Yes, while they knew their 50-50 partnership was actually a 25-25-25-25 partnership between the each of the partners and their spouses, it really wasn’t a concern. The partners ran the business together and the spouses had been best friends for decades.
But the instant one partner is no longer able to function in the business due to illness, disability or untimely death, the new business relationship is 50-25-25. Potentially, in an instant.
What’s the Cost of Waiting?
Why haven’t many business owners addressed this vital planning issue?
- It is rare that an attorney is going to reach out and proactively offer their services for $600 an hour to get a proper buy-sell agreement in place.
- When the owners do consider the possibility of working with the other’s spouse, they worry that their total legal bill will be outrageous. (It’s not!)
- They are so busy running their day-to-day business that they just don’t even think about it. The really should take the time to plan their business transition.
- They think there will always be time to do something later. But it is never too late … until it is too late.
The cost of both the legal and financial aspects of buy-sell planning are very, very affordable. The costs of waiting, however, can impact just about every relationship the owner and the business have. Especially their spouses.
Don’t wait. Just contact me for a free conversation today.
Strategic Business Advisor
to Arizona Business Transitions
President & CEO, Gibson Insurance
Clint founded the firm in 1971. He has the unusual qualification of being in the same business, in the same city, with no turnover in staff for nearly half a century. As a 45-year veteran Chartered Life Underwriter and Chartered Financial Consultant, he receives all of his work from repeats, requests and referrals.
His style is to develop a strong, personal relationship with clients, their family or business associates, and their advisors. He works with clients regarding estate planning, business agreements, deferred compensation planning, and personal life insurance.
As a long-time specialist, Clint has developed relationships with the top underwriters for many of America’s best life insurance carriers and in many cases can negotiate favorable offers for clients that would not be available from other sources.
Clint is a very experienced, well-known specialist whose education and industry relationships can be of extraordinary value to those who seek his help.