What Would Happen If?:
Do you have a plan to cover the "what if" scenarios? What if you were suddenly unable to run the company? What if you eventually want to retire or cut back on your daily functions in the business? What if you were to die? What would happen to the business? Its management? Its ownership? Owners focused on the here and now in their businesses, often haven't or don't want to take the time to think about these difficult questions. Yes, these can be difficult issues to confront yet every business is at risk sometime during its life span of having the owner become incapacitated or not present at all. This is the reality of owning a business. It is imperative that you as, an owner, develop a plan in the event you are no longer actively running the business. Consider two scenarios. In both of these scenarios, you own a business - the day to day operations, company direction and vision are critically dependent upon your presence. In the first scenario, the business supports your family. You suddenly die. What would happen to your family, the employees, and the business? In the second scenario, you are thinking about retiring or maybe are ready to retire. Your family may not depend on the business for support. You may need its continued success for your retirement income. Your employees and the future of the business need to be addressed. The questions about the future of your business are basically the same, whether the event is your death or retirement. You are at a crossroad, do nothing or do something. In this case, doing something is to develop a contingency plan to deal with the unexpected, usually tragic circumstances such as an accident or death and a succession plan for the transfer of ownership and management. While the circumstances initiating the implementation of either a contingency plan or a succession plan will differ, there is one question common to both - the future of the business. Will it continue or will it be sold? If it continues, will family members have ownership and management responsibilities? It may be necessary for the family to retain ownership without daily management responsibilities or the reverse, family members manage the day to day operations, and not own equity in the business. Once the future status of the business is determined, the planning process begins to deal with different issues. There are numerous resources available for creating contingency plans and succession plans. The most essential step is in initiating the planning process. Talk with family members, regardless of their involvement in the business. Decide what the best choices are for each situation. Engage professional advisors, who can work as a team, to address goals, financial security, tax planning, management, business strategies and timelines. As the visionary and creator of your company's future, contingency and succession planning are essential for the continued success of your business. With these plans in place, you are prepared for those unexpected circumstances and have structures in place to assure the business continues in the direction you've chosen. ©2000-present Flight Unlimited - All Rights Reserved |
