No, I am not referring to a business plan in the above post heading. I am referring to a succession plan.
Many Small Business Owners continually re-invest in the business, rolling all their profit back into their business’ equity. Most of the time, business owners feel that this is the responsible thing to do, and many times they are right.
So what is the plan if the Business Owner becomes disabled or dies?
When a business’ wealth is tied up in capital assets, it can make it hard for families to manage the transition. Many time they will end up selling the business for far less than proper market value, simply because they need liquid funds to pay creditors.
When I talk to a Business Owner about their goals, this is an area that most have not considered.
When you are a Small Business Owner, there is more to planning than just “business plans”.
(My thanks to Keith Colonna from Smith Barney for his insights on this topic.)