Small to medium sized businesses are usually run by and dependent on their founders or owners. They are the ones that took and idea and brought it to life for the company. They are the ones that established the business and put in all the hard work to get it where it is today. They are the ones that wear many hats and work countless hours to keep their “baby” alive and thriving. These are the founders and owners of businesses today.
What happens if they get hit by a “Big Truck” tomorrow and are gone?
This is a frightening question for any business owner and their business…but one that must be addressed as soon as possible…like yesterday. And, unfortunately, the answer isn’t usually an easy one unless there has been some extensive planning done in advance. Having a business that is dependent upon the owner being there tomorrow is one that operates in a higher than normal risk category.
There are 3 key steps we recommend every business owner goes through to address this issue and to have a plan that can be executed immediately. Every organization needs to go through these steps to ensure that they are protected from “The Big Truck” scenario. And these don’t happen over night so getting started sooner than later is critically important.
Here are the 3 things we recommend every business owner should do…
Start the Discussion and Build a Plan
The hardest thing to do is to start the conversation. This is a tough conversation and one that no one wants to have…today…but is incredibly happy they had it if the time ever comes…tomorrow. Get started. Get a facilitator to help guide you through these discussions on a regular basis. This won’t get solved in one meeting but will move you closer to the right solution the sooner you start.
Planning is absolutely critical for this to work. After a certain number of discussion sessions, create the outline of the plan that you feel needs to be implemented to cover your bases. The simple test is to ask yourself, “If the owner/founder was gone tomorrow, could we continue to operate as usual with minimal interruption?” When you get to a plan that gives you “YES” for an answer, you have completed the first step.
Seek Outside Counsel in Critical Areas
Once you have developed your plan, it is now time to review this with the outside organizations that could be affected by this situation or who could help you get through it much easier and faster. For example, having a conversation with your banker, accountant, business lawyer, suppliers, and others, you will have additional input that will help you to finalize the plan you developed. It will definitely have some changes to it after you meet with these advisors.
These people will help you to see other critical areas that need to be incorporated to make sure this transition can happen the way you mapped out in your plan. They can give you insights that might change what you do today and tomorrow to expedite this plan and make sure it doesn’t hit any major roadblocks. For example, there are many legal issues that might have the owners’ signature on them or that they have complete control over because it is their company. Creating some key documents that could be put into action immediately upon them being gone could help expedite many business decisions that need to be made. This is just one of many examples that can help you pre-plan for an emergency such as this.
Map Out the Plan and Execute
The next big step is to take the plan, now that you have the variables, issues, and resources identified, and start to execute. This will happen over some period of time, not instantly. Try to shorten the amount of time as much as possible without significantly impacting your business. This is always a balancing act but important to get it done without causing significant impact to your business or your customers.
Identify the people that are needed to make these transitions happen and start grooming them for these changes as soon as possible. Without question, when the owner/founder is gone, others have to step into different roles. Getting them trained in these roles ahead of time will help ensure the business can continue to operate smoothly should something happen to the top leader. Have them fill in for the leader in these roles and make critical business decisions so they are on board and feeling comfortable should something happen.
Sure, this takes some extra time but it can save an incredible amount of time and money down the road if something should happen to the head leader. These can be done in different ways to help grow the people in their new “emergency” roles. And it’s important to note, just because you have people trained in this role to take over should something happen doesn’t mean they will be the permanent person for that role going forward. We are trying to develop and emergency plan for when something happens. After this has occurred you will have more time to figure out the right people as the company continues to operate.
What to do next…
This scenario is one of the many reasons why we created Your Concierge CounselSM. We created it to help organizations think through situations just like this and to have legal counsel immediately available before, during, and after such a horrendous event. When you have a lawyer at your disposal when you need them, things can happen much more efficiently and much faster. If you would like to learn more how this works, please visit Your Concierge CounselSM to learn more or give us a call and we’ll be happy to meet and walk you through how all this works to minimize this issue.
Also, if you just want to better understand how you can minimize and lower your risks (which every business owner wants) then please read some more about risk management and how you can help determine your own risk. I’d also be happy to meet with you (complimentary of course) to discuss your own personal situation further and give you some insights about how you might want to proceed.
I hope you have found this helpful and given you a different way to look at your business. If it has, please share this with others inside your company and your colleagues who are running or leading other businesses. Our primary mission at Generations Law Group, LLP is to help everyone find productive ways to lower their business AND personal risk. This is just one way you can start to do this…but it will tell you a lot about you and what has happened over the past few years with regard to your business risk. Let’s make sure your risk is as low as it can be while you continue to grow.