5 Ds to Plan For

I was 25 years old and my dad’s instructions to me and to my older brothers was to go have an estate plan done and for all of us to put together a buy-sell for our family business.

My wife was really upset because she thought it was ridiculous for someone so young to go through the trouble of having a Last Will and Testament put in place.

But it was really as much for her protection and our future kids as it was for my business and my partners.

When you have partners in business whether they’re related or not, a plan for the 5Ds is essential for heading off an untimely death to your business or an incredible struggle for the survivors.

A good plan requires at a minimum professional advice from your accountant and your lawyer. The problem is they tend to only focus on their area of concern and they lose track of the big picture. For example, an accountant may only be interested in the tax consequences while the attorney is only interested in the legal consequences. They’re both important but the plans can be at odds.

The way I did it and the way I have my clients do this smart planning is to gain clarity on what they want first to happen when the 5Ds come up [hang in there I’ll explain soon] and then get both the accountant and attorney in the same room so they’re both on the same page. It’s worth every penny to do it this way because mistakes made will have big repercussions later on.

Once you have a plan, there are preventive steps that may involve key insurance policies and a buy-sell that is always kept current and based on a measurable valuation. This is where it can make a lot of sense to bring in a Certified Financial Planner and a Professional Insurance Broker based on your proposed plan to make sure contingencies are put in place that make sense.

Okay, what are the 5Ds? Here they are:

  1. Death:         Let’s face it we don’t live forever. And when you’re young you can feel invincible but life can turn fast. It’s expensive to die and without a good plan it can be ruinous to your family and your business partners
  2. Disability:    You could be disabled from job related accidents or walking across a street and getting hit by a car.  I don’t know but I do know it happens. And if it did..what would you and your family do to address the bills and loss of future income? Plus, you may need to be replaced at your company so it can continue to function for your partners and their families
  3. Divorce:     This could be a messy divorce from your spouse that handcuffs the business or it could be the growing desire to be free of your business partners. Once you want a divorce to happen, it’s too late to be planning for it.
  4. Disaster:    Natural catastrophes like hurricanes, floods, earthquakes and more can wreak havoc. Sometimes, it’s local to just your business that had a devastating fire or some other thing that’s put you and your business flat on your back
  5. Debt:           Crippling debt can arise from mismanagement, killing the golden goose by sucking out too much money in perks, weak sales, crumbling economy and a whole lot more. There comes a time that bailing out may be better than crashing the plane into the ground and injuring others

My goal is for you to not wait till the 5Ds arise.

Al Levi teaches contractors how to run their businesses with less stress and more success with operating manuals. To get control of your business and grow the right way, get his Build Your Operating Manuals Online Program at 7powercontractor.com/byom today.

Also, check out Al’s latest business adventure, Zoom Franchise Company, at www.zoomdrain.com/franchise-opportunityIt’s a living example of the power of manuals and more in action.

More Ways to Become a 7-Power Contractor

The 7-Power Contractor book lays out 7 simple business powers to help you run your business with Less Stress and More Success. And now, it's available in paperback, ebook, and audiobook.

The Build Your Operating Manuals (BYOM) Program provides you with 90% completed manual templates plus step-by-step instructions on how to edit them, roll them out, and train with them.

The 7-Power Contractor Radio is a podcast series hosted by Al Levi in which he shares insights on how to better run your business. Listen wherever you are.

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