Protecting Your Legacy: Why Every Business Owner Needs a Continuity Plan

Authored by: Eric Van Der Hyde, CFP®, CEPA®, RICP®

As a financial planning firm dedicated to helping closely held businesses thrive across generations, we understand that your business is more than just a source of income—it’s your life’s work, your legacy, and a reflection of your values. Yet, many business owners overlook one of the most critical components of long-term success: a business continuity plan.

What Is a Business Continuity Plan?

A Business Continuity Plan (BCP) is your company’s blueprint for maintaining operations during and after a disruption. Whether it’s a natural disaster, cyberattack, or the unexpected loss of a key leader, a BCP outlines how your business will respond, recover, and resume normal operations. Think of it as a safety net that ensures your business doesn’t just survive adversity—it continues to grow through it.

Why It Matters for Closely Held Businesses

Unlike large corporations with deep benches and vast resources, closely held businesses often rely heavily on a few key individuals. If something happens to you or another critical team member, the ripple effects can be devastating. Without a continuity plan, the business may be forced into a rushed sale or even liquidation—outcomes that rarely reflect the owner’s true intentions.

A well-crafted BCP helps you:

• Preserve the value of your business.
• Protect your employees and customers.
• Maintain trust with vendors and partners.
• Ensure your family’s financial security.
• Safeguard your legacy.

What’s Involved in Building a Continuity Plan?

1. Define Your Goals

Start by identifying what matters most to you. Is it maximizing value for your heirs? Preserving jobs for loyal employees? Continuing a family tradition? Your goals will shape every decision in the planning process.

2. Identify Critical Functions

Determine which business operations are essential to keep running during a disruption. This includes everything from payroll and customer service to supply chain logistics and IT systems.

3. Establish Leadership Succession

Who will lead the business if you’re no longer able to? Whether it’s a family member, a trusted employee, or an outside buyer, grooming and retaining future leaders is essential. This often involves years of training and mentorship.

4. Create Incentives for Key Employees

If your business is family owned and your plan involves non-family managers, you’ll need to keep them engaged. Tools like phantom stock or performance-based bonuses can reward loyalty and performance without giving up ownership if the intent is to remain family-owned.

5. Plan for Ownership Transfer

Whether you plan to sell the business, pass it to family, or transition it to employees, you’ll need a strategy that minimizes tax exposure and ensures a smooth handoff. This may include gifting strategies, trusts, or holding companies.

6. Build a Communication Strategy

In a crisis, clear communication is vital. Your plan should outline how you’ll keep employees, customers, and stakeholders informed and aligned.

7. Test and Update Regularly

A continuity plan isn’t a one-and-done document. It should be reviewed and tested regularly—through tabletop exercises, remote work drills, and employee training—to ensure it remains effective as your business evolves.

The Hidden Value of Continuity Planning

Beyond risk mitigation, a strong continuity plan can actually increase the value of your business. Buyers and investors are more likely to pay a premium for a company with a clear succession strategy and a stable leadership team. It also builds confidence among employees, customers, and partners—reinforcing your reputation as a resilient, forward-thinking organization.

How We Can Help

At Concentric Wealth Partners, we specialize in helping business owners like you design and implement continuity and succession plans that reflect your values and protect your legacy. We often “quarterback” the process as we collaborate with your legal, tax, and business advisors to ensure your plan is not only effective but also tax-efficient and aligned with your long-term financial goals.

If you don’t yet have a business continuity plan—or if you’re unsure whether your current one is up to date—now is the time to act. Reach out to our team today to learn more about this process and what is involved. We love helping business owners create and implement a plan that helps ensure their business continues to thrive, no matter what the future holds.

While we are familiar with the tax and legal provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Eric Van Der Hyde and not necessarily those of Raymond James.