In this week's Freedom Friday blog and email newsletter, I'm going to talk about a topic I've discussed before, but this time, I'm going to approach it a little bit differently.  I've talked about the need for your small business to plan for disasters and to have contingency plans before, but I want to look at this topic on a more nuts and bolts level.  In today's Freedom Friday blog and email newsletter, I'm answering the question, “How can I protect business assets from disasters?”

If you've been in business for a while, you will have hopefully grown your business and built up a lot of business assets.   Business assets are things like cash savings, equipment, proprietary processes, and of course, your business reputation.  All of these things are worth a lot of money (how much would you value your business if you were considering selling it), but you don't want to lose any of these items in the case of an emergency or a disaster.  Emergencies and disasters can take a lot of forms, but these can also include emergencies that occur for you as the business owner.  If something happens to you as a small business owner, you need to plan for emergencies and disasters to protect your small business.   In today's Freedom Friday blog, I want to share three (3) key documents to protect your small business in the case of emergencies or disasters:

1.  Operating Agreement

The first key document that will protect your small business in the case of an emergency or a disaster is an operating agreement (if you're an LLC), or if you're incorporated, your corporation's bylaws.  The reason why an operating agreement is so essential for your LLC is that often it will explain what happens to the business when the business owner dies or is otherwise incapacitated.  This is even more important in a multi-member LLC when two (2) or more LLC members own the company.  The operating agreement will explain the procedure if any of the owners is incapacitated or unfortunately passed away, and how the company will continue if such emergencies happen.

2.  Transition Plan

The second key document which will protect your small business in case of an emergency or disaster is a transition plan.  While an operating agreement will help your small business identify a successor owner or owners, a transition plan will assist the new owner or owners in their responsibilities once they take on that role.  This will make sure the small business continues to operate and stay consistent in the fact of a serious accident, emergency, or disaster. 

3.  Business Wind-Up or Exit Plan

The third key document which will protect your small business in case of an emergency or disaster is a business wind-up or exit plan.  A business wind-up or exit plan will explain what will happen if the business is closed, either because the new owner(s) wish to close it, or if it is closed involuntarily.  The business wind-up or exit plan will help protect the owners against any liability if they do not close the business in the proper way.  The LLC can be voluntarily dissolved, or if necessary, judicially dissolved, as well.  The business wind-up or exit plan will also explain what happens to the business assets upon dissolution, and how any remaining liabilities will be taken care of, as well. 

Thinking about starting a small business?  Or maybe your business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/