Skip Header Navigation


» Business Solutions
Resource Centre
  Business Tips
  Starting a Business
  Growing your Business
  Expanding a Business
  Business Succession
  Why Plan Now?
  Common Exit Strategies
  What's Your Business Worth?
  Legal & Tax Issues
  Grooming Your Successor
  Creating a Retirement Plan
  Support & Resources
  Industry Expertise
» Business Accounts
» Borrowing & Credit
» Investments
» Merchant Services
» Payroll Services
» Online Banking
» Branch & ATM Locator
» Commercial Financial Services
» Contact Us
» Search
Business Resources - Business Succession

Creating a Retirement Plan


Put It All In Writing

Setting out the key elements and stages of your exit strategy on paper will help give you a clear picture of what needs to be done and when. Common sections in a written plan include:

Long-term business goals: This should outline how the current ownership and others see the business growing in years to come.

Financial statements & issues: These reports provide a snapshot of your business' assets, liabilities and tax exposure.

Owner's retirement needs: Include an assessment of the owner's personal financial situation, showing the amount of investment in the business and income needs in future years.

How to identify, assess and declare a successor: State what types of leadership skills, education levels and other talents the business will need.

Ownership and management structure: Set out the ownership rights and business responsibilities of key family members and employees.

Critical path and timetable: A critical path of events is needed, ranging from the completion dates of educational requirements for potential successors to the transition date.

Communication plan: A communication strategy for other family, shareholders, employees, customers and professional advisors is also important.

Other aspects of the written retirement plan such as legal or tax procedures can be hammered out with professional advisors.

Revising Your Shareholders Agreement

Your shareholders agreement is critical, since it addresses so many core retirement issues:

  • division of ownership, power and share structure;
  • roles and responsibilities of shareholders;
  • composition of the board and voting rights;
  • framework for resolving shareholder disputes;
  • options in the event of death, disability, divorce and other unforeseen circumstances; and
  • buy-sell provisions.

In some cases, a retirement plan will require a new shareholders agreement.

Buy-Sell Agreements

Buy-sell agreements set out terms and conditions for acquiring and selling interests in the business. These agreements provide liquidity for the estate, and business continuity in the event of the death, disability or retirement of an owner.

A legal advisor and tax accountant should help determine the best form of buy-sell agreement for each business.


Insurance is a specialized business tool. For example, under a buy-sell agreement, co-owned businesses can use insurance to finance the purchase of a shareholder's interests in the event of death or incapacity. "Key person insurance" helps compensate a business for any financial losses due to the death or disability of an essential person. Think about disability income replacement insurance for yourself as well.

Lining Up Financing Options

Traditional financing options for retirement include:

  • secured loans, based on hard assets;
  • subordinated debt, which is used when cash flow is strong; and
  • equity investments.

Increasingly, owners are also looking to a wide variety of insurance products to finance retirement and protect against illness. These insurance-based plans should be carefully scrutinized in advance by your advisors.

Revisit Your Plan Regularly

As you near retirement or the exit moment, you should revisit your plan to ensure it's on track. Here are some warning signs that it isn't:

  • Rigid, inflexible provisions not tailored to the people involved or changing circumstances
  • Lack of opportunity that causes key people to leave anyway
  • Poor communication of the plan
  • Selection of unqualified or unmotivated people
  • Failure to hold individuals accountable for goals and requirements

Why Are You Still Here?

It can be difficult for owners to leave the business they created. They may want to remain involved with the operations beyond the retirement date.

Researchers have found that transition to new ownership and management is most successful when the previous owners pursue other interests-or even start another business.

In the end, perhaps the most important retirement goal you can set for yourself is to take advantage of other opportunities life can offer.

More Support & Resources
Jump to
Put It All in Writing

Take Action
  Contact Us
  Business Banking Centres

Related Links
  Financing Options
  Deposit Accounts
  24 Hour Access
  Investment Services
  Payroll Services
  Business Insurance
  Merchant Credit & Debit Card Services

Learn More
  Starting a Business
  Expanding a Business
08/23/2010 16:11:05