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The 5 Critical D’s of Business Planning Thumbnail

The 5 Critical D’s of Business Planning

Contingency planning is just as vital to a well-running business as a healthy revenue stream or locking in your industry’s top talent.

Without a contingency plan, your business is vulnerable. But it doesn’t have to be that way. By looking at the worst the future can bring, no matter how ugly it is, you can build a safeguard for your business against the worst that may come – even your own death.

To formulate a proper set of contingency plans, consider the 5 D’s:

  • Death
  • Disability
  • Divorce
  • Departure
  • Disagreement

No matter how unpleasant it is to face each of the five D’s of contingency planning, creating a plan to overcome each of these setbacks is vital to add stability to your company, which, in turn, also adds value.


There’s a reason lawyers are always telling us to create or update our will – everyone hates thinking about death and will avoid it without a lot of prodding. Consider this yet another prod to think about proper planning for untimely death, that of you, your partner’s, or of your executives.

Every business should have a system in place in case of the death of any of the partners, officers or directors. These plans need to be laid out while everyone is in good health, so that if things do get difficult, or death is on the horizon, there is a pre-existing framework for everyone to work within, offering both direction, and at least a modicum of peace of mind.

A comprehensive plan for an executive’s death should include:

  • Insurance – This will help smooth out any bumps as your contingency plan comes into play and helps put your company back on course.
  • A Succession Plan – There should be a succession in place for everyone of the executive in any business. That means someone in the company needs to have immediate access to everything required to step into the role of the deceased. From knowing passwords, and combinations for locks on safes that hold any documents or agreements, to knowing where important documents are stored so they can get themselves up to date.
  • Considerations About Shares – If the deceased had shares in the business, then you’ll suddenly find yourself in business with an entirely new set of people (their family or estate). Prudent consideration needs to be given to the buy-out rights given to these new people, and how you value their shares.

With these plans in place, your business can navigate even in the most stressful situations life might bring.


This may not be as inevitable as death (or taxes), but disability can do as much damage to a business as a death can if there’s no plan in place. The last thing you want to be doing is trying to weigh the future of your business, with the well-being of an ill, or incapacitated owner or executive.

Disability is best handled through a combination of:

  • Employee Benefits – make sure your benefits plan includes a program that will cover any disability of an executive.
  • Director and Officer Insurance – this can be expensive, but it’s worth considering to help secure the future of your company.
  • A Succession Plan – Even if it’s just temporary, it’s important to have a succession plan that will keep your business running smoothly.

Along with these three considerations, your disability plan should define how, and when it can be used, and by whom.


No one gets married believing that divorce will happen to them, so they push it far out of their mind. So when divorce does happen, few are ready for the ramifications it will bring.

Depending on your business, a divorce could have huge implications. Just like death, divorce could suddenly add an unwanted partner to your business if the judge decides your partner’s shares are fair game. This could lead to your business partner losing their controlling share, or the capital to keep your business afloat. Partners should consider the possible ramifications, and solutions, such as pre/post nuptial agreements and buy-out rights, which would stem from a divorce.


Everyone in the executive will eventually leave the company, whether through death, retirement, or new life priorities. A proper plan will insure that the split remains equitable and doesn’t cause chaos in your organization.

A partner or executive leaving raises a host of questions that should be planned for:

  • What’s the value of their shares?
  • How can the company buy them out without handicapping business?
  • Should they be able to immediately compete with the company they just left?
  • How much notice is required?
  • And many more depending on circumstances.

By planning ahead, and creating a package that the executives all agree on, you give everyone involved guidelines to follow, making the transition smoother, fair, and uncomplicated.


Disagreements don’t seem to fit with the rest of the D’s, but if you’ve been in a partnership long enough, you realize how intense a disagreement can become – how it can tear apart relationships and even businesses.

Every business needs to deal with answering big, company-defining questions, like:

  • Should the company reinvest profits for business growth, or take shareholder dividends?
  • Should the business take a leap and expand, or remain the same, stable size?
  • How will the company structure shareholder benefits?

When partners disagree on the answers, the foundations of the business can shake, unless you have a superstructure that will help guide you through – even if the rest of the business is on shaky ground.

Working with partners to create superstructures and practical tools to navigate these disagreements when the relationship is strong will help give both sides something to hold onto, as well as the ability to navigate through any dispute when disagreements threaten to cause a rift. This provides stability in an unstable time, smoothing out the ripples of the disagreement, and avoiding any massive fallout.

The Bonus ‘D’ – Document

It’s important to have a plan for each of the above contingencies, but having a plan doesn’t mean anything if you don’t properly document it. For each contingency plan there needs to be a document that is signed by everyone involved, so if the worst happens, it can be used both as a guideline for those remaining, as well as rules to stick to should things get out of hand.

Adding Value and Security to Your Business

Whatever your plan for the future, whether that means growing your business, or getting to a place where you can sell it, well documented contingency plans will add value to your company by making the future more manageable – regardless of what comes down the pipe.

At Bayview Financial we can help you plan for the future you’re working towards, regardless of what may come. Contact us today to ensure vitality and a smooth transition through whatever life throws at you and your business.