What Happens to Your Business if You Are No Longer Able to Run It?


Nearly 75 percent of small businesses don’t have a succession plan, according to a recent survey.1 To put that into perspective, it’s as though three-quarters of the commercial jets in the air right now don’t have a co-pilot. That may sound dramatic but think about it. If the owner of a small business suddenly dies or becomes incapacitated, the company may stay aloft for a time — but the odds of an optimal outcome rapidly diminish without a plan in place.

This daredevil bent is not surprising: Entrepreneurs tend to be calculated risk takers. In a recent study, it was shown that entrepreneurs typically align with the financial profile of Ambitious Spenders who put an emphasis on saving to start or expand a business.

But protecting a business is as important as growing it. Research also shows that Ambitious Spenders prioritize creating wealth and building a legacy. With the right succession planning, small business owners can help to ensure both the long-term success of their business — and greater financial security for themselves and their family for years to come.

Here are three steps to help get your succession planning off the ground:


Succession planning is a blueprint for continuing or liquidating a business when the owner is no longer involved. If continuance is the goal, who will take control? Many business owners assume their children will want to be involved, but that may not be the case. Some issues to explore:

  • Are my family members interested in running the business?
  • Do they have the skills and aptitude?
  • How will those family members who are uninterested in the business share in the legacy?
  • Would it be preferable for an outsider to assume ownership?
  • How will that transition be managed to protect my heirs?


Insurance is a key element in a business succession plan.

  • Whole life insurance: In the event of an owner’s untimely death, the benefits from a whole life insurance plan may be used to pay creditors and provide survivors with financial resources to either maintain the business or liquidate it. If the owner decides to retire, a whole life policy may be used to fund supplemental retirement income.2
  • Disability insurance: Disability insurance provides valuable stop-gap financial protection if an owner is unable to work due to illness or injury. The proceeds can help the business meet its day-to-day expenses, as well as business loans and other longer-term financial obligations — until the owner is back on his or her feet.


Developing a well-designed succession plan can be one of the most significant financial decisions you’ll make, which is why you should consider consulting with a knowledgeable financial professional who will take the time to understand your business and provide unbiased advice. Owners of high-growth, small businesses are more likely to rely on advice from professionals than owners of companies with declining revenue.3 Knowing this positive correlation between planning and success, a solid business succession plan will help you feel even more confident and secure in your financial future.


CA Insurance License #0H33733, Registered Representative Park Avenue Securities LLC (PAS). OSJ: 3585 Maple Street, Suite 140, Ventura, CA 93003, 909-399-1100. Securities products offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Pacific Advisors LLC is not an affiliate or subsidiary of PAS or Guardian. Insurance products offered through One Pacific Financial & Insurance Solutions LLC, DBA of Pacific Advisors LLC. Pacific Advisors LLC is not a registered investment advisor.

Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. 2018-54005 Exp. 2/20.

Prepared by The Guardian Life Insurance Company of America. The information contained in this article is for general, informational purposes only. Guardian, its subsidiaries, agents or employees do not give tax or legal advice. You should consult your tax or legal advisor regarding your individual situation.

Brought to you by The Guardian Network © 2018. The Guardian Life Insurance Company of America®, New York, NY.

2017-34333 Exp. 1/19

Brought to you by The Guardian Network © 2018. The Guardian Life Insurance Company of America®, New York, NY

2017-49717 Exp 11/19


[1] http://www.cpapracticeadvisor.com/news/12365113/72-of-small-businesses-dont-have-succession-plan

[2] All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Individual disability income products: An individual’s eligibility for benefits is determined on a case-by- case basis, taking into consideration the factual circumstances presented as well as the terms and conditions of his/her policy(ies). Individual disability income products underwritten and issued by Berkshire Life Insurance Company of America (BLICOA), Pittsfield, MA. BLICOA is a wholly owned stock subsidiary of and administrator for The Guardian Life Insurance Company of America (Guardian), New York, NY or provided by Guardian. Product provisions and availability may vary by state.

[3]  https://www.guardianlife.com/news/guardian-life-small-business-research-institute-identifies-six-steps-improving-revenue