The long hours, sacrifices and many anxious moments over the years have paid off and enabled you to develop a successful business. Your investment of time an money has resulted in a financial asset - your business - that forms the major component of your personal wealth, providing:

• Income to yourself
• Security to your family

as well as the satisfaction of providing:

• Employment to your staff,
• and a unique service to the community.

It is often said that entrepreneurs like yourself form the backbone of the Canadian economy, and you should be proud of the success you have achieved.

However, the continued success of your business is completely dependent upon your ongoing management and expertise. In other types of business structures such as partnerships and corporations there are at least two people who share responsibility for the management of the company. As a sole proprietor, every aspect of the business is your responsibility - and yours alone!

With the ongoing responsibilities of dealing with the day - to - day operation of your business, and providing security for your family and employees, you are left with little time to plan for your future.

Although it may be difficult to imagine yourself absent or unable to manage your business, you need to ask yourself these questions:

What would happen if you were not there to run the business?

• Would the business continue to operate?
• Would financial obligations such as taxes, business debt, and other liabilities be met?
• Would the cost of these liabilities greatly diminish or destroy the value of your business for your successors?
• Would there be a smooth transition of ownership to a chosen successor or willing buyer?
• Would business or personal assets have to be sacrificed to pay the costs incurred?

If the answer to any of these questions is "yes", it's time to do some succession planning and / or review your existing plan.

Planning for the future of your company and everyone who benefits from the business is critical. Your untimely death or a life threatening illness could result in one of the following situations:

One of your family members may continue to run the business.

• Do they have the ability and experience to do so?
• Would they be able to secure credit?
• Would your customers remain loyal to them?

Your employees could buy the business.

• Would they have the money to do so?
• Would your family be assured of receiving the fair market value?

In most cases, the answers to these questions are NO. Statistics show that without the necessary planning, liquidation is a very real possibility. In Canada, two out of every three family businesses do not survive to the third generation.

Forced Liquidation of the business.

• Often this may result in the diminished value of the business assets such as stock, accounts receivable, equipment, etc.
• Without your management and expertise, the real value of the business will decrease.

Is that what you had in mind?

Provide the capital required to maintain the ongoing operation of your business.

Insurance vehicles can play a major role in any business succession plan. Life insurance and critical illness plans can provide the capital needed to allow for a smooth transition - tax - free! Life insurance proceeds are tax - free at death and may allow tax - free accrual within certain plans. Critical illness insurance proceeds are tax - free and are paid out when the illness is diagnosed. This tax - free capital provides the owner and / or beneficiary with the means to continue running the business without interruption.

Succession plans vary greatly in degree of complexity, depending on the particular needs of the business.

I would be pleased to assist you in establishing a business succession plan to ensure that your business continues to remain strong and that your beneficiaries are fairly compensated for the value of your business.

If you have questions or concerns regarding this topic, please do not hesitate to call me or to use the Book An Appointment Form.