Business continuation plan is a coordinated strategy that ensures a closely held business can survive ownership or key-person changes due to death, disability, retirement, or voluntary departure. It typically includes buy-sell agreements, key-person insurance, management succession plans, and funding mechanisms such as life and disability policies. The goal is to provide liquidity for ownership transitions, protect remaining owners from disruptive outside owners, preserve jobs, and maintain enterprise value. A strong business continuation plan addresses trigger events, valuation methodology, tax consequences, and the rights and obligations of all parties involved.

Advisors help business owners design business continuation plans by working with attorneys, CPAs, and valuation experts. They recommend appropriate amounts and types of life and disability insurance to fund buyouts or replace key-person contributions. Advisors explain how different ownership structures"cross-purchase, entity purchase, hybrid, or trust-owned"affect tax treatment and control. Regular reviews are essential as company value, ownership, and personnel change. Understanding business continuation planning allows advisors to move beyond product sales and act as strategic partners in safeguarding the long-term stability of privately held companies.