Cliff's Notes

The Business of Dentistry

“Everyone has a plan, Until they get punched in the face!” … Mike Tyson

 

We all have plans to protect ourselves and our families but unfortunately most of us have that plan in our heads or a written plan that is several years old. As we have seen in the south over the last several weeks, things happen and disaster is real!

Disaster comes in all forms … When we think about a disaster we think about storms, fires and floods but what about all of the other scenarios that can develop. As a business owner everything you depend on has a disaster liability. From the electric to turn on your lights to death and disability, there needs to be a written and updated plan. One of the most overlooked and misunderstood disasters is the partnership buy/sell agreement.

The Partnership Buy/Sell Agreement … You may become a partner or take one on for a variety of reasons but is there a planned separation agreement? Taking on a partner is like getting married, everything is community property unless outlined by a legally bind-ing agreement. Unforeseen things happen all the time. What if your partner had a car accident that left your him/her permanently disabled or worst. Do you want their spouse or estate to be become your new partner? Guess what, unless you have an agreement in place they already are. Now you have to buy out the other side while dealing with, understandably, irrational emotions. You have to buy back your business.

Buying Back Your Business … Transitions are never easy. Money and emotions do not mix well. Predetermined values are essential to formulate a buy/sell agreement and funding that agreement should be put securely in place. If you have a business that is valued at $1M, you would need $500k to buy out a partner or an estate. But what about key personnel?

Key Personnel … The ultimate disaster for a business is the death of an owner, principle partner or manager. Replacement of that person can be difficult and expensive. Key per-sonnel insurance policies should also be part of a disaster recovery plan.

Disaster Recovery … I can’t tell you how important it is to prepare for that day that you get punched in the face and have to get up quick. You need professional advice and yes, it will cost a little money. Please feel free to contact me at any time with any concerns.

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September 21, 2017 - Posted by | Uncategorized

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