What happens if you get hit by a bus?

What happens if you get hit by a bus? Do you have a plan to secure your business's future?

None of us ever want to think about our mortality. How can the world possibly go on without us? The ultimate reality is that it will continue, and our actions today will determine our legacy and the future of the businesses we own and run. I considered calling this article “What Happens if You Win the Lottery,” but that didn’t resonate with me as I fully believe many business leaders “love” what they do and would continue even if they had a huge financial windfall. Thus, I went with the more fatalistic scenario.

If you take a good hard look at it, many companies would be decimated if the owner disappeared as they are involved in nearly all key activities of the operation.

Consider this: 48% of family-owned businesses go bankrupt upon the passing of the founder. Just think about that for a moment. That statistic includes companies that actually did some advance planning.

So, what do I suggest? On the surface, it seems pretty easy and straightforward — make a plan. Sounds simple, but it requires care, work, and planning. Who will run the business? Who knows where the “keys” are, both literally and figuratively? Who has the relationships with customers, vendors, and banks?

How do I know so much about this? Well, in addition to having all the fancy degrees and letters after my name (CPA, MBA, etc.), I have spent 35 years working for privately owned small to midsize companies. In short, I have been around the block more than a few times.

Here are three easy things to do right off the bat:

1. Look into Key-Person Insurance: This insurance is probably not as expensive as you might think and can pay for an outside professional to help run the business while the heirs figure out the next steps.
2. Get a Business Valuation: Hire an independent outside expert, not someone who wants to buy your business, but an impartial party. This provides a clear understanding of your business’s worth.
3. Get the House in Order: Ensure your accounting records, processes, and procedures are organized. This can help protect your legacy and your family financially and emotionally.

These three steps can significantly impact your business’s continuity, benefiting not just your family but also your employees and their families. There are many more steps that follow, but if you start well in advance, it will go much smoother. A business owner needs to think of the business as part of their investment portfolio, not just a short-term income generator. The business is just as important, if not more so, than the stocks and bonds in your portfolio.

Taking these steps not only secures your legacy but also ensures the continued success and stability of your business, safeguarding the livelihoods of everyone involved. Act now to protect what you’ve built, and give your business the best chance to thrive, no matter what the future holds.

Want help planning your family-owned business transition? www.impactcfo.net/freeto fill out a quick questionnaire and I'll send you a custom video with 3 actions you can take today to get your plan in place.

Looking forward to helping you,