By Lloyd Bell
January 28th, 2025
The most resilient businesses are ones that expect the unexpected.
Life-altering events like Death, Disability, Divorce, Disagreement, and Distress — which are known as the “5 Ds” of succession planning — may be unexpected, but that doesn’t mean you can’t plan for them. While no succession plan is foolproof, you can stay on track if you craft your succession plans with the 5 Ds in mind.
5 Ds of Succession Planning:
- Death: The unexpected loss of a key leader or decision maker in the business.
- Disability: A health issue that causes a key leader to be incapacitated or unable to perform their duties.
- Divorce: Divorce of one or more of the business’s leaders.
- Disagreement: Conflicts among business owners, or conflicts between owners and another stakeholder (like banking partners, investors, key suppliers, etc.).
- Distress: When the business is operationally or financially taxed.
The 5 Ds have the power to affect the continuity of your business. Here are a few things you can do to combat these disruptions.
Small businesses should almost never settle on one strategy. As they move through the lifecycle of their business, those strategies should shift and adjust in response to external factors (like new tax laws or changes in marketplace conditions) and internal factors (like unexpected disabilities or disagreements with business partners). Be flexible, and change your succession strategies when needed.
Lloyd Bell, Meaden & Moore, Cleveland, Ohio
