What is the Difference Between a Succession Plan and a Continuity Plan?
A continuity plan (CP) is a document that provides direction and specific instructions for the business and business owner’s loved ones at such time the owner is no longer able to participate in business operations, or if their participation is potentially on hold any reason. The CP should address communications and operating contingencies for disruptions in business operations and disaster recovery.
Entrepreneurs build their businesses through their vision, laser-like focus, commitment, and hard work. Every single day. Their businesses thrive because they create success. But, what happens to the business and its clients and its employees when they are suddenly gone? What is the plan to protect the value of the business for owners’ families? A Will transfers ownership. The Buy/Sell section of the company’s Operating Agreement only sets the terms of a sale as it defines a qualifying or triggering event. What about the actual perpetuation of the business that protects the clients, employees, estate, and the value of what the business owner(s) built?
A meaningful CP should accomplish the following:
- Name who will run or perhaps purchase the business in your absence
- Designate who your loved ones should consult with during the transition (your contingency team)
- CP consulting contact
- Continuity partner (designated manager or buyer)
- Insurance agent
- Information technology firm
- Instructions for obtaining a valuation
- Communication to your contingency team
- Templates for communicating to your clients
- Guidance on communicating to and reassuring employees
- A list of all service providers with contact information
- A checklist for your successor to follow to reach out to providers and how to interface with your contingency team
- Create a plan for communicating with clients including order taking
- Outline continued funding options
- Site options for temporary operations should your facilities become unavailable to you
- Annual review of your CP with your continuity planning consultant with distribution of updates to your contin gency team
- Payment structure
BTS consults with business owners to guide them through the decisions necessary to create a meaningful plan or adapt their Operating Agreement & Buy/Sell Agreement to accomplish the goal of providing for the continuity of their business and operations in the event the owner can no longer participate in their business.
To discuss your potential needs for a CP, contact Dennis Leininger, President, at email@example.com.