What would happen if ...?

Have you ever stopped to ponder what the family business would do if something suddenly happened to the key person?

• What would happen if the key person was unable to perform his or her normal duties?
• What would happen if that person was run over by the “proverbial bus”? 
• Who would take over the business? 
• Who knows the secrets of the business? 
• Who knows the secret formulas, recipes or deals that have been done with suppliers? 
• How would the bills be paid? 
• Would the bank call up the loan? 
• How would the principal’s family survive?

Key questions to be answered include:

• Has the principal written out a set of instructions on what should happen to the business if something should happen to him or her?
• Has this list been given to a solicitor or placed somewhere safe where it will be found if something happens to the principal?
• Has adequate insurance been effected on the life of the principal and on the life of any partners in the business?
• If a partnership or a company with outside shareholders, has a formal “Buy/Sell Agreement” been entered into?

Have the secrets of the business been written down, so that they are available in the event of the demise of the principal?  

www.astillhawke.co.nz