What if You Get Hit by a Bus?
By Tom Kirk
A plan for how your business would operate in the event of the sudden and unexpected absence of one or more the owners (a business continuation plan) and a plan for how the ownership of the company might be transferred to others (a business transition plan) are much more connected than you might first think.
Most small businesses lean heavily on the knowledge and experience of a small group of owners, or even one single owner. Due to their high level of commitment to their business, these individuals are often the first to arrive at work and the last to leave, contributing their expertise whenever and wherever it is needed to keep things moving successfully forward.
But what if some or all of these people got hit by the proverbial bus? What if a car accident or illness took some or all of them out of the business for an extended period of time, maybe forever? How will the business continue to operate in their absence? Your business continuation plan can answer these questions and more.
One way to start this plan is to imagine that the owner is unavailable for differing lengths of time: say less than thirty days, ninety days, six months, nine months and a year or more. Then think through the effect these various lengths of absence would have on parts of the business (sales, operations, marketing, personnel, etc.). You will discover that some parts of your business will do fine without you, but others may fall apart, especially if you are out for a long time. This knowledge can help you decide what changes you may want to make internally, or what additional resources you may want to add so your business can continue even if you are laid up for six months or more.
Your business continuation plan is simply the documentation of all this great thinking. It may include changed lines of authority and responsibility depending on how long you are expected to be away from the business. It may also include the specific actions that will be taken over the first 100 days of your absence: when and what to say to your customers, employees, bankers and suppliers; when and what additional resources will be tapped; who has authority to make what decisions if you are not available.
Here’s the connection between business continuation planning and business transition.
Once you have a plan in place for how your business would continue if you were accidentally not there, you also have a plan in place for how the business would continue if you were not there on purpose, i.e. you took increasingly longer time away from the business and / or eventually transitioned it to others. A business whose future existence is not dependent on the continuous involvement of its owners is worth a lot more to others than one that is.
A business transition plan has a myriad of other issues that must be addressed if you want to be among the 1% of businesses that last more than ten years and successfully transition their ownership. That is why we offer The Transition Roadmap Developer™; a transformational process that takes into consideration the practical, financial and emotional aspects of your unique business transition challenge and delivers a customized step-by-step action plan designed to increase your likelihood of success.
Business continuation planning could be the foundation of your business transition plan. Call and schedule your complimentary consultation with one of our WealthCoaches™ to see if The Transition Roadmap Developer™ is the process you may want to investigate for improved clarity in this critically important area of your personal and business life.