“A little less conversation, a little more action, please.” This Elvis Presley song was playing during my morning drive today. A terrific beat to put some pep in your step!
If you see planning as something that just slows you down, I get it. Doers do and contemplators, well, they contemplate.
So how can you turn planning your exit into profitable, value building action steps for your business?
At some point after owning and operating a business for a number of years, owners are confronted with the challenge of how to successfully transfer ownership and transition out of the business. This can be a daunting and somewhat complex process, however if the proper plan is put in place this procedure will allow you to harvest the fruits of your labor and enjoy retirement to its fullest, knowing that you did it the best way possible. EXECSO and Koch Select can help you do just that.
First, let’s consider why you might be avoiding the development of a written succession and exit plan.
- It is unnecessary because the future is unknown
- You do not have time
- You already have it in your head
- It’s too soon
Starting with these exit planning building blocks will help you visualize the future, give you more time, get ideas out of your head thereby bringing alignment among your team.
And, it is never too soon. Building your business to sell from day one will increase the value of your business and empower your employees. Even if you never intend on selling your business, reducing owner dependency is a powerful way to diversify your wealth.
What can you do today?
- Conduct a mock due diligence.
Astronauts conduct test run after test run. Now the due diligence checklist may not be as extensive as a Mars trip checklist, but if you have ever been through the due diligence phase, it can sure feel like it. This process will get your house in order and ultimately create more efficiencies in your business.
- Write a “Break Glass in Case of Emergency Guidance Letter”
What if you don’t show up for a day, a week, a month? Does your business have an operational continuity plan? Does your spouse or family know where all the keys and secrets are located? Do them a favor by listing advisors, other critical relationships, procedures, and your general guidance on how you would like the business ran.
- Ask yourself these questions: When do I want to exit or change my relationship with my business. Who will own my business next? Who will run my business next? These two answers can be different. How much money do I need out of my business? Then, WRITE THESE ANSWERS DOWN.
Congratulations, you have just begun your written exit and succession plan. Elvis would be proud!
The professionals at EXECSO will assist in determining the business’s value and implementing the proper structure & agreements for transferring ownership and transitioning out of the business while Mike Smolsky and Koch Select will help with evaluating and implementing the appropriate property, liability, auto, and workers compensation insurance policies for the process.
Ultimately, every business owner has to find their own risk tolerance level and make choices about their insurance program. Undergoing a thorough review is critical to ensure the right coverage is in place!
If you would like templates on the Guidance Letter or Mock Due Diligence Checklist, shoot Brady an email at email@example.com. Contact Mike Smolsky with Koch Select at Mike.Smolsky@hakco.com for insurance policy assistance.
Check out EXECSO’s podcast at www.execso.com.