Life-changing, triggering events occur suddenly when least expected. Being prepared is key to protecting the survival of your business. In all cases many scary moments occur. Take the case of Bob Stone.

An accidental fall in his office resulted in a lengthy coma. Prior to the fall he had felt invincible. Stone intended to operate the business for another fifteen years before giving it to one of his younger children or selling it. His family was solely dependent on the company for income and benefits.

Stone regained consciousness ten months later and found everything concerning the business had been going great considering the slowing economic climate. Hard decisions reducing the number of employees and scaling back the company had just been completed prior to the accident. Critical decisions remained that would determine the business's survival.

His fall set into motion a contingency plan that included a Durable Power of Attorney and Operating Plan. Stone and his wife Elaine had developed the plan with the aid of a business-experienced planner who emphasized the importance of including the operations plan just in case something happened to him.

Elaine had worked with Bob building the company for fifteen years before retiring to raise their family. He frequently updated her as to the status of the business. She was aware of the company's fifteen employees' strengths and weaknesses and current and future contracts.

Once Elaine was satisfied that everything possible was being done for Bob, she turned her attention to running the business. She took Bob's Durable Power of Attorney, giving her legal authority to substitute for him, and the company's operating plan from their home safe. The plan told her:

Ø To contact the listed professional advisors

Ø Who to trust

Ø Key operating information

Ø Options for keeping their owner interest in the company

Ø Where to obtain additional information

Her prior experience together with the assistance of loyal employees and professional advisors allowed her to step in on short notice to operate the company.

Key to preserving the business's survival was:

ü Elaine's current knowledge of the business

ü Her management skills

ü A legal transfer of authority

ü A written operating plan

This story is the exception, not the rule. Caring for the affected spouse can be emotionally draining and time consuming. Most family businesses end up failing when the principal spouse is unable to participate in daily operations.

Consider the alternatives. Waking up to:

· Find your business is being operated by a court appointed manager

· It has been sold

· Worse case --- it is closed and the hard assets have been auctioned

Without any Planning - The business stumbles along as chaos rules the day. State statutes will determine the business's future if the business can continue to operate long enough while new leadership is determined. Odds are Bob will not have his business to return to when he awakes from his coma.

Elaine in this case is ill prepared to take over the business. She has to hire an attorney to represent herself and other members of the family, draining the remaining family savings. Elaine becomes financially desperate as the family income from the business ceases. Benefits such as health insurance are only continued as long as Bob's owner interest is retained.

Time becomes of the essence as Elaine's legal representative tries to protect the business's survival. Obtaining an opening in the court's schedule can be difficult. Few operating decisions are rendered in an initial hearing. If multiple parties challenge the direction of succeeding hearings, the case can take months and sometimes years before a final decision is rendered.

Very few courts have been successful at micro-managing a business. In a worse case scenario several hearings are necessary before a judge:

· Appoints an attorney to represent Bob

· Appoints a guardian for Bob

· Appoints a conservator to oversee his assets

· Approves a new manager to replace Bob as principal operator

In the meantime the business is left to flounder on its own. Elaine in the end is forced to sell the business, or if it has closed, sell remaining company assets as she runs out of money and time.

Estate Plan with no Operating Plan - Estate planning typically includes a Durable Power of Attorney for incapacity and a Will for death. Generally there is no operating plan for a business. Key to protecting the survival of a business is its continued operation.

A named successor without operating knowledge or management experience is like someone walking into a black room with no operating light switch. Elaine's application of Bob's operating plan ensured the family business's continued operation.

What makes the survival difference?

ü Estate planning that included a Durable Power of Attorney

ü An operating plan

ü Identifying a successor

ü Minimizing time to transfer operating authority

ü An appointed successor's industry operating knowledge and experience

Stone and his family are fortunate that Elaine was able to keep the family business operating while he recovered. Bob had a business to come back to while the family retained its financial life-blood.

Each business is unique requiring its own customized planning. A business owner needs the aid of a design team that includes a legal, tax and professional successor advisor who has operated a company. It is difficult for an owner to be objective if they try to do it all on their own.

Is your business prepared to operate on a continuous basis without you? You need a plan!

About the author: Dick Yemm, CFP® is an author, speaker and consultant on succession planning. His award-winning book, "The Stories," was developed with a series of seminars on contingency/succession planning for business owners and their families. Dick is a professionally licensed Certified Financial Planner™ and holds multiple levels of security licenses. For more information please call 772-562-1281, email rileyspress@atlantic.net or visit www.yourbusinesswithoutyou.com