“The COVID-19 pandemic is putting a spotlight on business continuity efforts,” Adobe Sign reminds us. At Geyer Law, we agree. While starting a business takes time and effort, planning for future contingencies is important as well; the pandemic calls our attention to the importance – and the urgency – of business succession planning.
“Global companies have to be predictive and proactive in their decision-making to preserve business continuity and build enterprise resilience,” ey.com warns. As attorneys here in Indiana, we know that it is not only global companies that must consider certain priorities of contingency business planning that EY pinpoints, but small, family-owned businesses as well:
Initiate or expand flexible work arrangements and other policies that allow people to work remotely and safely.
Preparing for business disruption
Evaluate short-term liquidity and assess operational risks, examining budgets and business plans. Business disruption can be caused by many different events or developments, including a pandemic such as COVID-19. In terms of business estate planning, the purpose is to ensure that if an owner or key employee becomes disabled or dies, that the business can continue. For those of our Geyer Law clients who want their business to pass down to the next generation, advance planning is the only sure way to accomplish that result.
Communicate with stakeholders
Many small business owners, when thinking ahead to the future, envision themselves retiring and selling the business before they pass away. If a business has co-owners, an agreement can be established stipulating that when an owner dies, his or her interest is automatically purchased by the other owner(s). Of course, if there is going to be a successor other than someone already active in the business, that person will need to be trained. Will the same people who own the business be the ones managing it moving forward? Will retiring owners continue to receive money from the business? COVID-19 has highlighted the need to have those talks – sooner rather than later!
Maximize use of government support
“Our nation’s small businesses are facing an unprecedented economic disruption due to the Coronavirus outbreak,” the U.S. Small Business Administration stresses. Our attorneys are working to help business owners understand and, where appropriate, take advantage of Economic Injury Disaster Loans.
At Rebecca W. Geyer & Associates, we know that owners of closely-held businesses have special needs.Too often, owners are so busy developing their business that they don’t take time to address the legal issues needed to ensure their continued success. COVID-19 has provided a reminder to all of us of the urgency of good planning, and our attorneys work closely with business owners’ insurance agents, tax professionals, and investment advisors to design a complete succession plan.
– by Rebecca W. Geyer