Succession Planning

Succession Planning

A Strategic Approach to Your Business Succession Plan

You’ve worked hard to build a great business. With careful planning, you’re looking forward to a bright and successful future. But what would happen to your business if you or another owner dies, becomes disabled, or wants to retire? A business succession plan is the road map to navigating the smooth transition of ownership during your lifetime or at death.

Strategy 1: Key Person Insurance

Purchasing key person life insurance ensures that your business will go on after you are gone.

  • Assures creditors and customers of a smooth transition and no hiccups in business operations.
  • Covers the expense of finding and training a suitable replacement.
  • Provides the company with a valuable asset of the company’s balance sheet that can be used to cover unexpected corporate expenses.
  • Potentially can be used by the company to fund supplemental retirement income for the key employee.

Strategy 2: Buy-Sell Agreement

Through a buy-sell agreement, you have the opportunity to determine who takes over the business – whether it be family members, remaining partners, or key employees.

Advantages to the Business’ Successor

  • Immediate liquidity - Permanent life insurance cash values and death benefits are available to help purchase the business ownership.
  • Cost efficiency - Life Insurance can be a cost efficient vehicle to finance the sale of ownership shares, which may occur during life or at death.
  • Stability - Provides for an orderly transfer or the business with limited interruptions in sales or management.

Advantages to Your Heirs

  • Protects your investment - P A buy-sell agreement funded with life insurance converts your business interest into cash upon death.
  • Avoids a forced sale - A properly funded buy-sell agreement avoids the risk of a forced sale at less than market than market value.
  • Family protection - Buy-sell proceeds can be used for family income needs and estate settlement costs.

Build Your Plan with CBIZ Life Insurance Solutions

Having a succession plan in place will help transfer ownership of your business to the correct people in the future and offers valuable benefits today. When you have a succession plan in place, banks, clients and suppliers have greater confidence in the stability of your business. Let CBIZ Life Insurance Solutions help you develop a plan that aligns with your current and future needs and goals.