How do you educate your clients about the importance and benefits of a buy-sell agreement?

2 Highlight the benefits

The next step is to highlight the benefits of having a buy-sell agreement. With one, your clients can ensure that they have a smooth and fair transition of ownership, regardless of the circumstances. For example, they can specify how to value the business, how to fund the purchase of a departing owner's share, and who can buy or sell their share. They can also reduce the tax burden on themselves and their heirs, by planning ahead and using appropriate valuation methods and payment options. And they can preserve the stability and goodwill of the business, by avoiding conflicts and disruptions among the owners, employees, customers, and suppliers.

3 Show examples

The third step is to show examples of how a buy-sell agreement works in practice. You can use real-life cases or hypothetical scenarios to illustrate how a buy-sell agreement can prevent or resolve common issues that arise when a business owner exits the business. For example, you can show how a buy-sell agreement can help a family business avoid inheritance disputes, or how it can help a professional partnership maintain its license and reputation. You can also compare and contrast different types of buy-sell agreements, such as cross-purchase, redemption, or hybrid, and explain how they suit different situations and objectives.

4 Address objections

The fourth step is to address any objections or concerns that your clients may have about creating or updating a buy-sell agreement. Some common objections are that a buy-sell agreement is too expensive, too complicated, or too restrictive. You can counter these objections by showing how a buy-sell agreement can save money, time, and hassle in the long run, by avoiding litigation, valuation disputes, and tax penalties. You can also simplify the process by breaking it down into manageable steps, such as choosing a legal advisor, drafting the agreement, reviewing it regularly, and funding it properly. And you can reassure your clients that they can customize their buy-sell agreement to fit their needs and preferences, by including clauses that allow for flexibility and adjustments.

5 Provide resources

The fifth step is to provide your clients with resources that can help them learn more about buy-sell agreements and how to implement them. You can recommend books, articles, podcasts, webinars, or workshops that cover the topic in depth and provide practical advice and guidance. You can also introduce your clients to other professionals who can assist them with the legal, financial, and operational aspects of a buy-sell agreement, such as lawyers, accountants, appraisers, insurance agents, or business brokers. And you can offer your own expertise and support as a trusted advisor and partner, who can help them achieve their goals and protect their interests.

6 Encourage action

The final step is to encourage your clients to take action and create or update their buy-sell agreement as soon as possible. You can motivate your clients by reminding them of the benefits and risks of having or not having a buy-sell agreement, and by emphasizing the urgency and importance of the matter. You can also create a sense of accountability and commitment by setting a timeline and a plan for completing the process, and by following up with them regularly. And you can celebrate their progress and success by acknowledging their efforts and achievements, and by providing feedback and recognition.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?