Most small businesses that have one or more owners have at one time or another discussed what would happen if one of them died or became disabled due to an accident or illness. How would that affect the bottom line, especially since most small business owners are also involved in the day-to-day work of their businesses?
These are tough questions to ponder. No one wants to admit that tomorrow is an uncertainty. No one wants to see the down side or acknowledge the loss of a business partner could ruin their entire collective efforts and dreams.
Worse yet, have you ever asked yourself:
Questions for Business Partners
* Would I want my partner’s spouse or child to be my new business partner?
* Would they even have a clue to what really goes on in an office, shop or factory?
* Would they be willing to take any risks?
Reality is that the death or disability of a business partner would impose a huge financial drain on your budget. We have seen it before. Once thriving businesses close their doors because there isn’t enough cash flow to continue paying the deceased partner’s family after having to find someone else (and paying them) to take over their job.
Besides the devastating blow of losing your friend, confidant, partner and fellow dreamer, you now have to face the future alone. After all, didn’t you rely on him/her to pull their own weight? Didn’t you hold him/her accountable for doing their fair share? That’s what partners do- -they give 110% so their joint endeavor can be financially rewarding.
The loss of your partner doesn’t have to be a nightmare without end. You can pick up the pieces after a tragic loss. Granted you will miss the discussions and debates over the next major decision affecting the future direction of your business, but the loss of your partner does not have to spell doom.
One of our capable advisors can help you design a simple insurance plan to protect your business and pay your deceased partner’s spouse/estate the full value of that partner’s percentage of ownership in the business. By structuring a life insurance policy on each partner, a lump sum distribution will buy his family out of the business and allow the surviving partner to be sole owner of the business.