For those of us that are small business owners, our customers know us and trust us for the services we provide. Who will they go to for service in the event we are no longer available? Many of our businesses are either small or are set up in such a way where the owner or president is the main contact to assist customers. In these circumstances, it is difficult to transition customers to employees or other officers as a substitute, when customers are accustomed to that contact person who runs the business; or is the decision maker that ensures the business’s proven success.
This is why a succession plan is important to document among the company’s partners or shareholders. Most often among smaller businesses, when something is to happen to a key figurehead, the value of the business or even its good will among customers may suffer. As such, business owners should consider protecting the company with the use of insurance to cover the costs involved to the company in loosing certain personnel. Another protection may involve setting the company up with a consultant that can guide the business to train other personnel to power it. This will allow customers to become accustom to other officers and employees carefully trained to drive the business to function the way its owners do. With this goal in mind, the business is primed to run on its own in the event such owners are not available. Such planning may also increase the value of the business as a going concern by preparing any new owner to be better positioned to take over operations down the road.
Gee Law is available to help you draft your business agreements with succession planning to structure the company to function as well as it does even when you are not there. Gee Law is also equipped with a network of reliable consultants, to refer owners, that can guide the business to become more self-sufficient and valuable in the future. For a consultation on how to ensure these protections, feel free to contact Gee Law for a free consultation!
Kevin Gee is an experienced Michigan attorney ready to assist you with your business and estate planning needs.