04-09-2017 I’ve always thought that the title “Death of a Salesman” is depressing, even if the show, the movie, all the creative that has surrounded it, is not. I guess it was because my father was a salesman, and from an early age, I thought it was written about him.
No, this is not one of those upbeat posts about succession planning and how to develop subordinates. This is one of the more difficult conversations every business owner must face. Developing a functional plan highlighting a Succession Planning scenario is one of the more difficult items we discuss with clients. I’ve actually had family members attack me for even bringing it up!! If insurance salespeople think that selling a life insurance policy is difficult, they should try speaking with a business owner, generally at the height of his or her career and live, fully engaged in their business, making money and viewing a strong future, about what will happen to the business should he or she meet an early demise.
That Just Will Not Happen to Me
Oh yes, it will. On January 21 this year, it almost happened to me. Blood clots tend to block your ability to move oxygen through your lungs, and after rushing to the local ER unable to breathe, and going through a CT Scan and multiple tests, those pesky blood clots–also known as “Pulmonary Emboli” showed their ugly faces on my CT Scan. On mine! Not someone else’s, but my own. Does that bring on some lifestyle changes? You bet. Miracle drugs? Multiple types. The doctors said I was, oh, about 6 hours from calling some other dimension home. It’s worrisome when it happens, and really makes you think. I’ve always been one of the people who don’t get sick…and all of a sudden, I’m faced with the grim reaper.
It’s a sobering thing for anyone to face…especially when it’s you. I had just written an earlier version of this column for this website. But yes, unless you are a completely unique and specially qualified individual, you are going to pass from this mortal coil into something defined by your beliefs–and, as fate would have it, the event will happen sooner than you probably wish it will. And what happens to your business when it does? If you’re like most business owners we know, you want to have a say-so in what happens to your business. And the real world is, when you’re gone, you’re gone. So how can you have a say about what happens after you leave?
Have You Planned for Your Final Chapter?
Please share that you have a will in place to help define your last wishes. If not, this is an absolute first step in planning for the end. If you do have a will, does it take into account your business wishes? If not, it’s time to revisit the landscape of the will and define who will and who will not be involved.
“Herein,” as was said in the early days of exploration, “lie dragons.” Family members immediately assume that the business assets will flow to them, but–not so fast. Time to visit with a competent Attorney to accomplish the task of defining who takes over the assets of the business. And in some cases, the person who takes over the assets of the business is not the person who ends up managing or creating the functional entity of the business in the end. That’s why a competent Attorney needs to be involved in your process of positioning.
Want to See a Family Split Immediately? Make the Wrong Choices.
There are few things sadder than seeing a profitable, functioning business destroyed by a second or third generation family member who sees the gift as a burden. And yes, it does happen more frequently than we want to give it credence.
What the grandson sees is a business burden that helped kill the grandfather. What the grandfather saw was an attempt to help the grandson establish his life and ultimately reap the rewards he believes are due. Forget the immediate family. Look to the future to see what can befall your business. It may not be a pretty picture. Families who are used to having money may just believe it’s their right, not an obligation to protect the assets of the business.
How Can I Avoid Catastrophe?
Plan now for what will become a time of tragedy for your family. They will be making decisions during a very difficult time, and won’t be completely cognizant of the challenges they are facing until sometime long after the fact. Your business must continue to run, however, with or without your presence.
If there is not a clear cut successor to the owner, it’s time to identify one, and see that the baton of leadership can be passed in as seamless a manner as possible.
If there is not a clear succession plan for management of the business to grow while you are still around, that’s your obligation to make that happen.
If your family isn’t interested in succession management, be sure that your will includes specific instructions on how to manage the business in your absence.
This all falls within your planning process for management and ownership growth and development. If you’ve been working with a potential manager for some time prior to this, the business has a 48% better chance of survival than the less acceptable 22% survival rating of businesses which have no formal succession plan in place.
We hope every client lives for many years, but reality tells us that won’t happen. We’ve already had to deal with succession planning for clients younger than we are.
Is it time to put your succession plan into action? Give us a call at 917-224-6782 and we can help you address some of the more important aspects of assuring your business succeeds you. Successfully.