After college, Jennifer joined a high school friend as a partner in his business. They were quite a successful team. Unfortunately, he was killed in a car crash.

Jennifer's friend Dan was the company's majority stockholder. Jennifer owned the balance of the outstanding shares. When Dan died, his wife Denise inherited his portion of the stock. With her partner's wife in control of the business, Jennifer was fairly certain that it would be difficult for her to continue working at the company.

And she was right. Denise quickly started moving the business in a new direction. Jennifer sold her stock to Denise, and the women parted on less than friendly terms. Jennifer eventually left the area. She knew Dan would have wanted her to take over the business, but no formal arrangements had been made.

If Dan and Jennifer had taken the time to set up a business succession plan, this situation might have been avoided. They could have spelled out an arrangement for the purchase of their stock in the event of death in a buy-sell agreement.

Unfortunately, many small business owners neglect to put a business succession plan in place. Without a plan, the chaos that results if an owner dies or becomes disabled can put the business at risk. The good news is that these uncertainties can be eliminated. Call if you'd like help developing a succession plan for your business.

Copyright 2004 by NPI.
Used by permission