Are You Ready

I think one of the major areas many of us need to address is getting our companies ready for transition. There are a lot of things that can require a transition:
1. Get hit by the bus and die
2. Get hit by the bus and live – disability
3. Get divorced or lose a spouse
4. Get wise and retire

There are lots of things that can change the circumstances so quickly. Life is very fragile and many of us are not planned or prepared for things that may happen. Of course, we all believe it will never happen to us. But I can tell you it does happen to many, and in fact, several of these items will definitely happen to you. It is all about timing. So the real question is – are you ready today?

Here are some things that I believe all of us need to really address and take action on:
1. Will – there is really no excuse not to have one. If you have kids there is absolutely NO excuse. If you have a partner or other stockholders there is NO excuse. If you are a hermit and live by yourself with no living relatives and no relationships with any other living human – maybe I would consider discussion – but probably there is NO excuse then either. It does not cost much but it can save you plenty. More importantly it is critical for the benefit of those you would leave behind.
2. Living will and power of medical attorney – lots of things that need to be considered here. Some legal, some moral, some spiritual. But don’t leave those decisions to a stress filled emotional decision at time of tragedy. Figure out your wishes now so it is clear and make it known to those who will carry it out for you. Make sure your t’s are crossed and I’s dotted so there is no doubt if it is needed.
3. Insurance – this is a tool that has to be evaluated and planned. I am not an insurance expert so will not give you any advice on how much or which kind but I will tell you to find an expert and listen to them. There are so many types and kinds of insurance that can do so many things. You will need some unless you are independently wealthy and again can impact no one else if you die or are disabled. That leaves most of us out and we need some.
4. Buy/Sell agreements. If you have any partners, stockholders or other people that will be affected by a change in your status – this is a must. It is much easier to have this determined ahead of time than trying to work it out later. Make sure it has valuation formulas included. This is so critical for your spouse so they are not burdened with trying to deal with the situation and transition the business at the same time. You owe it to those you love.
5. Exit plan. It might be retirement, maybe a sale, ESOP or any number of ways you will leave your business. Again you need to hire expertise to help evaluate and make sure your final wishes get achieved. To be a great business person, you need to know how you will exit your company and have a well defined plan in place. Again it does not do much good to get to the point of needing it before you start. It is too late then.
6. Execution team. You need to have someone or a group of trusted people who are in the know and can execute your plans and wishes. This could be family, but in the case of business assets, it may be wise to have other business people you know and trust serve on a team for you. What a great thing for a group of peers that know your business and you because of being in a peer group together. I think this is a great way for peers to serve each other and provide the ultimate value for each other.
There are many other things you may need to consider – find an expert to help you – probably a CPA, lawyer, insurance broker and banker at a minimum. Build a team and sit them down together to help you identify the things you need to do. Make plans, document them, and share them with the people you are asking to execute on your behalf. Do it now – before you need it. It is way too late after something happens. Hopefully you will never need it but if you do, it will be the best time you have ever spent!