You know the importance of having a continuity plan for your practice – it lays out what you want to happen when you are no longer running it.
It’s a great first step in creating your succession plan. But unlike a succession plan, a continuity plan is implemented immediately, rather than over a period of months or years, due to an unexpected disruption in your ability to work.
A succession plan typically assumes you will not return to run the practice; a continuity plan addresses the possibility that you will.
If you’re looking for reasons to create a continuity plan in 2020, consider these:
Your staff
If something happens to you, your staff will be on the front lines explaining the situation to clients, vendors and business partners. You owe it to your staff to prepare a plan for what happens if you suddenly cannot run the business and to review the plan with them.
Your family
Unless your family is involved in your practice, they probably have little understanding of how it works. They will be ill equipped to make immediate, important decisions.
Your business partners
If you partner with other advisors or work within a branch or financial institution, how will revenue generated from your clients be split? If you die, will your family get any of that revenue?
Your estate plan
If your practice is successfully sold, how will the proceeds of that sale impact your estate plan? You need at least a basic valuation to gauge how taxes and other obligations, such as business expenses and payroll, might be addressed.
Your prospects
Having a continuity plan can be a great selling point when meeting with prospective clients. It shows you practice what you preach and that their needs will be met even in your absence.
Your peace of mind
Creating a continuity plan takes an important but often overlooked to-do item off your list. It can also get you started on your succession planning.
Your speedy recovery
If you face a prolonged illness or recovery from an accident, the last thing you need is the stress of worrying about whether your business is running smoothly without you.
Your practice valuation
Having a continuity plan can increase, or at least maintain, the value of your practice in the interim before a sale, as it helps ensure clients and assets stay with your practice until the transaction becomes effective.
Your income
As a small business owner, your livelihood is directly dependent on your ability to work. If you experience an injury or prolonged illness that leaves you unable to work, you still have basic expenses to cover.
Contact Iron Point today for a no-obligation coaching call to learn more ways you can set up a continuity plan for your practice.
Written by Securities America for distribution by Robert Santoriello