What is Contingency Planning? Contingency Planning, also referred to as Business Continuity Planning, is the planning done by business owners that are not intent on leaving their businesses at any time in the near future. On the contrary, those business owners intend to remain active in the business for years to come. Yet, they also understand the importance of planning for the business to be able to successfully continue its operations in the event that the owner is unexpectedly unable to continue working.
There are several problems that typically arise when there is an unexpected death, disability or other unavailability of one or more of the business owners. The first and most obvious is continuity of the business ownership. This problem can be addressed through Contingency Planning whether the business is a sole owner or multi-owner company. However, if not addressed through planning, the sole-owner business has little chance to survive and the multi-owner company may end up with unintended parties having ownership interests.
Other common problems are the company's loss of financial resources, loss of key talent, and loss of employees and customers. These, too, can be addressed through the Contingency Planning process so that the money required to effect a buy-out, provide capitalization, and provide incentives to keep necessary employees with the company will be available if and when needed.
Ultimately the goal of the Contingency Plan / Business Continuity Plan is to make sure that the business can survive, even if its owner does not.
Every business situation is unique. If you have questions or would like to discuss your specific situation, please give us a call at 818-781-0082 or Contact Us Today!