Business continuity planning is the dynamic process of planning for the time when the owner will have a less active role in the business. Your plan should address both management succession and ownership succession.

The first question should be: Will ownership and/or management remain in the family and if so, in what capacity? If your intent is to keep your business within the family, you will need to determine your family's needs and interests as well as the needs of the business. A family conference should be called to explore the relationship between the business and the family.

Here are some areas to explore:

• Discuss with members of your family who will participate in the business and in what capacity.

• Are some family members interested in maintaining jobs within the business, even though they may not be part of key management?

• What compensation should non-participating family members receive?

Questions to Explore
Whether succession involves a gift or a sale to family members or an unrelated party, these questions should be addressed:

• Who will ultimately own your company?

• When is the plan activated or how is it triggered?

• How will the price be determined?

• How will the purchase be financed?

• What will be the effects of a change in ownership and management on the operation and value of the business?

• How will management retain key employees?

• Will your company have enough cash reserves to carry it through the transition phase?

• How can income and transfer taxes be minimized?