Here's another post from my partner, Susan Laine.
I heard a story today from an appraiser who specializes in valuations of closely-held businesses. His story was a cautionary tale to owners who do not plan for their ultimate transition out of their business whether the transition is on schedule or due to unforeseen events.
There was a family trucking business with annual revenues in excess of $50 million. The father and son #1 ran the business. Son #2 was a trucker and not involved in the management of the business. One client was responsible for more than 50% of their revenue and the account was well managed by the father and Son #1.
The father, a pilot, took a trip with the mother and son #1. The plane crashed and all three died.
Son #2 was not equipped to run the business. In a short time, revenues fell by 75% from where were before the family tragedy.
If the father and sons had done Exit Planning with us, we would have addressed a wide variety of issues—from the concentration of revenues with a single client to the death of any or all of the family members—the business would have been able to survive.
A little planning would have gone a long way in preparing the business for this unforeseen event.
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